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India: Depreciation of goodwill; curative provision applies retroactively; lump-sum payments

India: Depreciation of goodwill; curative provision

The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).


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  • Depreciation of goodwill: The Bangalore Bench of the Income-tax Tribunal held that the taxpayer cannot claim depreciation on assets acquired through an amalgamation, including goodwill, more than the depreciation that would be allowable to the amalgamating company. The case is: United Breweries Ltd. Read an October 2016 report [PDF 315 KB]
  • Retroactive effect of change found to be “curative”: The Ahmedabad Bench of the Income-tax Appellate Tribunal held that an amendment made to a provision of the tax law concerning the rules for determining the value of consideration for immovable property was “curative” and therefore applies retroactively, effective from 1 April 2003 (the date when the change was introduced). The case is: Dharamshibhai Somani. Read an October 2016 report [PDF 335 KB] 
  • Lump-sum lease premium or upfront lease charges not “rent”: The Central Board of Direct Taxes (CBDT) issued guidance to clarify that a lump-sum lease premium or one-time upfront lease charges that are not adjustable against periodic rent, paid or payable for acquisition of long-term leasehold rights over land or any other property, are not “rent,” and thus are not subject to tax withholding (deduction) at source. Read an October 2016 report [PDF 273 KB]
  • Transfer of land: The Mumbai Bench of Income Tax Appellate Tribunal held that no transfer of land had taken place when the agreement for the development of the land clearly stipulated that possession of the land was allowed only upon fulfillment of certain conditions. The case is: Jawaharlal L. Agicha. Read an October 2016 report [PDF 329 KB]
  • CBDT final rules with respect to buy-back of shares: Final rules about the tax treatment of the buy-back of shares have an effective date of 1 June 2016. Read an October 2016 report [PDF 303 KB]

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