India: Bad debt claim as business loss; digital content depreciation
India: Bad debt claim as business loss; digital content
The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).
- Bad debt claim: The Delhi Bench of the Income-tax Appellate Tribunal held that a bad debt claimed on account of the sale of investment was allowed as a business loss even though the profit from a similar transaction was offered under the heading “capital gains” during earlier years. The case is: Anant Raj Ltd. Read a May 2020 report [PDF 189 KB]
- Electronic modes of payment: The Central Board of Direct Taxes (CBDT) introduced a new rule that prescribes the electronic format for tax payments under section 269SU—which provides that every person having a business turnover of more than INR 50 crore must provide facilities for accepting payments through electronic modes. Read a May 2020 report [PDF 159 KB]
- Depreciation of digital content as copyrighted intangible asset: The Chennai Bench of the Income-tax Appellate Tribunal held that digital content developed by an animation company was a copyrighted intangible asset and not computer software. Therefore, the taxpayer was eligible for depreciation at a rate of 25% instead of 60%. The case is: Pentamedia Graphics Ltd. Read a May 2020 report [PDF 309 KB]
- Principal component of lease rent paid not revenue expenditure: The Chandigarh Bench of the Income-tax Appellate Tribunal held that the principal component of lease rental paid for set-top boxes was not allowable as a revenue expenditure. However, the higher depreciation at a rate of 60% was allowed for the set-top boxes. The case is: Fastway Transmission (P) Ltd. Read a May 2020 report [PDF 198 KB]
- Shares received as part of family arrangement: The Delhi Bench of the Income-tax Appellate Tribunal held that shares received as a part of a family arrangement was not a sham or colourable transaction to avoid tax. The case is: Glebe Trading Pvt Ltd. Read a May 2020 report [PDF 306 KB]
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