Tag: Income Tax Appellate Tribunal

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...