“Section 92(3)”
The decision most relied on for Section 92(3) is Grasim Industries Ltd. v. CIT (321 ITR 92), cited in 194 judgments on BharatTax.
Leading authorities on Section 92(3)
This case clarifies the scope of the Commissioner's revisional powers under Section 263 of the Income-tax Act, holding that an assessment order can only be revised if it is both erroneous and prejudicial to the interests of the revenue, echoing the principles laid down in Malabar Industrial.
The issue of shares and share premium is a capital account transaction, not an income-generating event, therefore Chapter X (Transfer Pricing) provisions are not attracted to deem notional or hypothetical income from such transactions.
A high turnover criterion, such as above Rs. 200 crores, is a valid ground to exclude companies from the list of comparable companies in a transfer pricing analysis, as such companies are not comparable to those with significantly lower turnover.
The onus is on the revenue to establish the nexus between expenses incurred and exempt income before making a disallowance under section 14A.
Penalty under section 271AAB cannot be levied mechanically; the Assessing Officer must apply an independent mind, grant a hearing, and record satisfaction that the income genuinely falls within the statutory definition, which requires discovery of an unrecorded asset or income entry during search.
Payment of commission to doctors for referring patients to diagnostic centers or providing gifts, freebies, or hospitality to medical practitioners by pharmaceutical companies is against public policy and cannot be allowed as a business expenditure under Section 37(1). Demanding such benefits is unethical on the part of doctors, and paying them is equally unethical on the part of companies.
High turnover serves as a valid criterion for excluding a company from the list of comparable companies when determining the Arm's Length Price (ALP) in transfer pricing adjustments.
Interest on borrowed capital used to acquire an asset, paid year after year until the date of sale, must be capitalized and included in the cost of acquisition for computing capital gains.
