“domestic company”
The decision most relied on for domestic company is CIT v. ITC Ltd. (236 Taxmann 612), cited in 108 judgments on BharatTax.
Leading authorities on domestic company
When computing deduction under Section 80IA, specifically for inter-unit transfer of power, the benefit cannot be claimed based on rates chargeable by distribution licensees to consumers. The deduction must be computed based on the rate fixed by the Tariff Regulation Commission for sale by electricity generating companies.
The Multilateral Instrument (MLI) does not become legally enforceable under domestic law without a specific notification under section 90(1) of the Income Tax Act, 1961, for each affected Double Taxation Avoidance Agreement (DTAA).
Deduction under Section 80IA is allowable for captive power generation. The price for calculating this deduction is the rate at which the electricity board supplies power to its consumers, rather than the rate at which power generating companies supply to the electricity board.
Dividend Distribution Tax (DDT) is a tax on the profits of the domestic company, not on the shareholder. The Supreme Court's decision in Tata Tea Co. Ltd. did not address the precise nature of DDT as a tax on the company versus the shareholder.
The Tribunal may allow adjustments for differences between the tested party and comparable companies to eliminate material differences, provided accurate and credible evidence is furnished.
Working capital adjustment is an accepted adjustment provided for better comparability in transfer pricing. The Tribunal has held that working capital adjustment is necessary for better comparability.
Disallowance under section 14A is applicable to investments made in shares of domestic companies but not foreign companies.
A non-domestic company's Permanent Establishment (PE) in India cannot be taxed at a rate higher than that applicable to a domestic company carrying out the same activities, even considering retrospective amendments to tax treaties.
