Sebi tightens regulations for SME listing, widens UPSI definition

Disallowance of Rs 4.49 Crore in Management Service Charges as Excessive: ITAT Allows Payment at Arm's Length Using Cost-Plus Method The ITAT ruled on a case involving the disallowance of Rs 4.49 crore in management service charges by the Income Tax Department, deeming them excessive. However, the ITAT allowed the payment using the cost-plus method, which is considered an arm's length standard. The taxpayer had incurred management service charges from an associated enterprise, and the department argued that the charges were not in line with the market rate. The ITAT's decision allowed the deduction by applying the cost-plus method, which takes into account the reasonable expenses incurred for services. This ruling emphasizes the importance of determining the arm's length price in intercompany transactions.