Search Results For: Delhi High Court


Avenues Asia Advisors Pvt Ltd vs. DCIT (Delhi High Court)

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DATE: September 18, 2017 (Date of pronouncement)
DATE: October 3, 2017 (Date of publication)
AY: 2009-10
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CITATION:
Transfer Pricing: Steps to be undertaken in identification of comparable transactions/entities while fixing the ALP and the margin explained. Though the TNMM method allows broad flexibility tolerance in the selection of comparables, broad functionality is not sufficient to find the comparable entity. There must be similarity with the controlled transaction

In so far as identifying comparable transactions/entities is concerned, the same would not differ irrespective of the transfer pricing method adopted. In other words, the comparable transactions/entities must be selected on the basis of similarity with the controlled transaction entity. Comparability of controlled and uncontrolled transactions has to be judged, inter alia, with reference to comparability factors as indicated under rule 10B(2) of the Income Tax Rules, 1962. Comparability analysis by the transactional net margin method may be less sensitive to certain dissimilarities between the tested party and the comparables. However, that cannot be the consideration for diluting the standards of selecting comparable transactions/entities. A higher product and functional similarity would strengthen the efficacy of the method in ascertaining a reliable arm’s length price. Therefore, as far as possible, the comparables must be selected keeping in view the comparability factors as specified. Wide deviations in profit level indicator must trigger further investigations/analysis

Posted in All Judgements, High Court

CIT vs. Ut Starcom Inc. (India Branch) (Delhi High Court)

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DATE: September 25, 2017 (Date of pronouncement)
DATE: October 3, 2017 (Date of publication)
AY: 2007-08
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CITATION:
Transfer Pricing: A giant risk taking company like Infosys Technologies with huge significant intangibles and having huge assets leading to the exorbitant turnover is not comparable with a captive unit which is subject to minimum/ limited risk. The fact that the functional profile of Infosys is similar to that of the assessee is irrelevant

When we examine the profile of the assessee company vis-à-vis Infosys Technologies Limited in the light of the judgment in CIT vs. Agnity India Technologies Pvt. Ltd. (supra), there is no comparability for benchmarking the international transactions for the reasons inter alia that Infosys Technologies Limited is a giant risk taking company whereas, on the other hand, the assessee is a captive unit of its parent company and prone to minimum/ limited risk; that the Infosys Technologies Limited is having huge significant intangibles and having huge assets leading to the exorbitant turnover; that it is not in dispute that functional profile of assessee company and CIT vs. Agnity India Technologies Pvt. Ltd. is similar

Posted in All Judgements, High Court

Sabh Infrastructure Ltd vs. ACIT (Delhi High Court)

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DATE: September 25, 2017 (Date of pronouncement)
DATE: September 29, 2017 (Date of publication)
AY: 2008-09
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CITATION:
S. 147/ 148: Despite numerous judgements on the reopening of assessments, the Revenue authorities are repeating the same errors. Accordingly, Guidelines are laid down and the Revenue is directed to adhere to them

Before parting with the case, the Court would like to observe that on a routine basis, a large number of writ petitions are filed challenging the reopening of assessments by the Revenue under Sections 147 and 148 of the Act and despite numerous judgments on this issue, the same errors are repeated by the concerned Revenue authorities. In this background, the Court would like the Revenue to adhere to the following guidelines in matters of reopening of assessments

Posted in All Judgements, High Court

CIT vs. Renu Constructions Pvt. Ltd (Delhi High Court)

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DATE: September 6, 2017 (Date of pronouncement)
DATE: September 25, 2017 (Date of publication)
AY: 2002-03
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CITATION:
Search assessment u/s 153C: Proceedings u/s 153C of the Act can be initiated against a person only if the seized materials "belongs" to that person. It is not sufficient for the Revenue to urge that the seized document "pertains" to the person. Sinhgad Technical Education Society [2017] 84 Taxmann.com 290 (SC) followed

The recent decision of the Supreme Court in Commissioner of Income Tax, Pune v. Sinhgad Technical Education Society [2017] 84 taxmann.com 290 (SC) settles the legal position in favour of the Assessees. The Supreme Court, while affirming the judgment of the Bombay High Court, approved the decision of the Gujarat High Court in Kamleshbhai Dharamshibhai Patel v. Commissioner of Income Tax-III, (2013) 263 CTR (Guj) 362 that a document seized ‘should belong to a person other than the person referred to in Section 153A of the Act’. It has been categorically observed by the Supreme Court that the above position of law laid down by the Gujarat High Court is correct. Consequently, this Court rejects the contention of the learned counsel for the Revenue that even prior to 1st June 2015 at the stage of initiation of proceedings under Section 153C of the Act, it is sufficient if the seized document ‘pertained to’ the other person and it is not necessary to show that the seized material ‘belonged to’ the other person

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PCIT vs. Delhi Airport Metro Express Pvt. Ltd (Delhi High Court)

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DATE: September 5, 2017 (Date of pronouncement)
DATE: September 15, 2017 (Date of publication)
AY: 2011-12
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CITATION:
S. 263 Revision: For the purposes of exercising jurisdiction u/s 263, the conclusion of the CIT that the order of the AO is erroneous and prejudicial to the interests of the Revenue has to be preceded by some minimal inquiry. If the PCIT is of the view that the AO did not undertake any inquiry, it becomes incumbent on the PCIT to conduct such inquiry. The second option available u/s 263 (1) of sending the entire matter back to the AO for a fresh assessment can be exercised by the PCIT only after he undertakes an inquiry himself and not otherwise

For the purposes of exercising jurisdiction under Section 263 of the Act, the conclusion that the order of the AO is erroneous and prejudicial to the interests of the Revenue has to be preceded by some minimal inquiry. In fact, if the PCIT is of the view that the AO did not undertake any inquiry, it becomes incumbent on the PCIT to conduct such inquiry. All that PCIT has done in the impugned order is to refer to the Circular of the CBDT and conclude that “in the case of the Assessee company, the AO was duty bound to calculate and allow depreciation on the BOT in conformity of the CBDT Circular 9/2014 but the AO failed to do so. Therefore, the order of the AO is erroneous insofar as prejudicial to the interest of revenue”

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Pr CIT vs. Mera Baba Reality Associates Pvt Ltd (Delhi High Court)

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DATE: August 21, 2017 (Date of pronouncement)
DATE: September 4, 2017 (Date of publication)
AY: 2008-09 to 2011-12
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CITATION:
S. 263: Lack of inquiry vs. Inadequate inquiry: Revision on the ground that the AO did not conduct a detailed inquiry on account of paucity of time is unfair to the assessee and invalid (Amitabh Bachhan 384 ITR 200 (SC) & Maithan International 375 ITR 123 (Cal) distinguished

Where the Assessee has in fact furnished the details that are available with him along with explanation to the queries raised by the AO, to permit the exercise of the revisionary jurisdiction only on the ground that the AO did not have sufficient time to verify the details furnished would be unfair to the Assessee. The PCIT must be satisfied, after application of his mind, that the order of the AO was erroneous with respect to the material made available to him. No such application of mind by the PCIT is evident from the impugned order

Posted in All Judgements, High Court

Oriental Insurance Co Ltd vs. DCIT (Delhi High Court)

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DATE: August 30, 2017 (Date of pronouncement)
DATE: September 2, 2017 (Date of publication)
AY: 2005-06
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CITATION:
S. 115JB: As Insurance companies are required to prepare accounts as per the Insurance Act and not as per Schedule VI to the Companies Act, s. 115JB does not apply. Insurance companies are not taxed on commercial profits but on profits as computed under the Insurance Act. Accordingly, income earned on sale/redemption of investments is not chargeable to tax

The different benches of the ITAT have, in other cases, consistently held that during the period when Rule 5(b) was not operational the profit on sale of investments made by general insurance companies cannot be brought to tax. In Bajaj Allianz General Insurance Co. Ltd. v. Additional Commissioner of Income Tax (2010) 130 TTJ (Pune) 398, the ITAT addressed the specific question of whether a logical conclusion could be drawn that an income that is not taxed in terms of Rule 5(b) could, even after such amendment was deleted, be taxed in the hands of the insurance company. It was held that income which was earlier taxable under one specific clause could not be brought to tax after the deletion of such clause

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Pr CIT vs. Bikram Singh (Delhi High Court)

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DATE: August 25, 2017 (Date of pronouncement)
DATE: September 1, 2017 (Date of publication)
AY: 2011-12
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CITATION:
S. 68: The use of deceptive loan entries to bring unaccounted money into banking channels plagues the legitimate economy of our country. The mere fact that the identity of the lenders is established & payments are made by cheques does not mean they are genuine. If the lenders do not have the financial strength to lend such huge sums and if there is no explanation as to their relationship with the assessee, no collateral security and no agreement, the transactions have to be treated as bogus unexplained credits

The transactions in the present appeal are yet another example of the constant use of the deception of loan entries to bring unaccounted money into banking channels. This device of loan entries continues to plague the legitimate economy of our country. As seen from the facts narrated above, the transactions herein clearly do not inspire confidence as being genuine and are shrouded in mystery, as to why the so-called creditors would lend such huge unsecured, interest free loans – that too without any agreement. In the absence of the same, the creditors fail the test of creditworthiness and the transactions fail the test of genuineness

Posted in All Judgements, High Court

H. T. Media Limited vs. Pr CIT (Delhi High Court)

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DATE: August 23, 2017 (Date of pronouncement)
DATE: August 24, 2017 (Date of publication)
AY: 2008-09
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CITATION:
S. 14A/ Rule 8D: Entire law explained on what constitutes proper recording of satisfaction by the AO, scope of disallowance of interest expenses under Rule 8D(2)(i), admin expenses under Rule 8D(2)(iii), need for nexus between borrowed funds and tax-free investments and power of the ITAT to remand to the AO

In order to disallow this expense the AO had to first record, on examining the accounts, that he was not satisfied with the correctness of the Assessee’s claim of Rs. 3 lakhs being the administrative expenses. This was mandatorily necessitated by Section 14 A (2) of the Act read with Rule 8D (1) (a) of the Rules. Consequently on the aspect of administrative expenses being disallowed, since there was a failure by the AO to comply with the mandatory requirement of Section 14 A (2) of the Act read with Rule 8D (1) (a) of the Rules and record his satisfaction as required thereunder, the question of applying Rule 8D (2) (iii) of the Rules did not arise

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Systra SA Project Office vs. DRP (Delhi High Court)

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DATE: August 18, 2017 (Date of pronouncement)
DATE: August 24, 2017 (Date of publication)
AY: 2013-14, 2014-15
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CITATION:
S. 144C DRP: Action of the DRP in granting time to the assessee till 24th July 2017 to submit documents but in still passing the order on the same day itself and that too without taking on record the documents produced by the assessee is clearly unreasonable and in violation of the principles of natural justice

Clearly, the Respondent acted in violation of the principles of natural justice, since despite the time being granted to the Petitioner till 24th July 2017 to submit documents sought by the DRP, the DRP passed the order on 24th July, 2017 itself and that too without taking on record the documents produced by the Petitioner till then. The time given for the Petitioner to do so was just four days. This was clearly unreasonable, particularly, since there was an intervening weekend between 20th and 24th July, 2017

Posted in All Judgements, High Court
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