Capital Expenditure | Pixr8 News

The Income Tax Appellate Tribunal (ITAT) rejected Indian tax authorities decision on Flipkart to pay INR 110 crores on the discounts offered by Flipkart in their capital expenditure account. As per the law, the tax authority targeting and demonstrating how e-commerce companies asked for tax exemption from earnings generated through discounted products, which deduct their taxable earnings considerably. However, the ITAT rejected the request of the tax government amounting Rs 110 crore from Flipkart for their year ended 31 March 2016 tax filings. This is the first favorable ruling given by the tax tribunal on this litigative matter and will certainly give relief to e-commerce companies across the country incurring similar expenditure Rakesh Nangia, managing partner at law firm Nang...

The income-tax department demanded Flipkart to classify its marketing expenses and discounts as capital expenditure and therefore asked the E-commerce giant to pay the sum of Rs 110 crore as tax demand for the financial year 2015-16 due to a reclassification order on how startups are taxed. However, Flipkart does not look likely to give up Rs 110 crore so easily and are challenging the order by appearing before the Income Tax Appellate Tribunal (ITAT) with the argument that tax cannot be collected from “fictional income”. Nothing in the IT Act mandates that a product has to be sold at a particular price, and revenue not earned (due to discounts grants) cannot be treated as capital expenditure, said Senior Advocate of Flipkart, Percy Pardiwala to the tribunal. The revenue departmen...

Tag: Capital Expenditure

Flipkart Wins 110 Crore Tax Dispute, First Such Case Won By Any Company

Flipkart Refuses To Pay Rs 110 Crore Income Tax