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DATE: November 27, 2019 (Date of pronouncement)
DATE: November 30, 2019 (Date of publication)
AY: 2007-08
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CITATION:
Law on taxation under DTAAs of "transparent entities" & "representative assesseess" explained: When an assessee is a representative assessee of a tax transparent entity, it is the status of beneficiaries or constituents of tax transparent entities which is relevant for the purpose of determining treaty protection (Linklaters LLP 9 ITR (Trib) 217 (Mum) followed)

The principle emerging out of this analysis of legal position is that when an assessee is a representative assessee of a tax transparent entity, it is the status of beneficiaries or constituents of tax transparent entities which is relevant for the purpose of determining treaty protection. Viewed thus, this is beyond doubt that the income in question has actually accrued to the taxable entities on the Netherlands, which, according to the approach adopted by the Assessing Officer, is sine qua non for tax treaty protection. It would thus appear that the treaty protection has indeed been wrongly declined to the assessee

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DATE: April 29, 2016 (Date of pronouncement)
DATE: May 7, 2016 (Date of publication)
AY: 2008-09
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CITATION:
Transfer Pricing: Corporate Guarantees are not comparable to Bank Guarantees & so the commission of 3% charged by Banks is not a benchmark to evaluate the ALP of a corporate guarantee but it has to taken at 0.5%. ITAT decisions which upheld the 3% rate cannot be followed as they are contrary to Everest Kanto 378 ITR 57 (Bom)

Instances of commercial banks providing guarantees could not be compared to instances of issuance of corporate guarantee. When commercial banks issue bank guarantees, the same is quite distinct in character, than the situation where a corporate issues guarantee to the effect that, if a subsidiary associated enterprise does not repay a loan, the same would be made good by such corporate. It is quite clear that the manner in which the Transfer Pricing Officer has proceeded to determine the arm’s length rate based on the probable rate being charged by the commercial banks is not justified. In this view of the matter, we are unable to approve 3% rate of guarantee commission fee determined as arm’s length rate by the income-tax authorities. In the alternative, the addition that is required to be sustained is the position canvassed by the assessee before the Transfer Pricing Officer i.e. adoption of 0.50% as arm’s length rate for the purpose of determining the arm’s length income on account of guarantee commission fee in the present case

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DATE: March 11, 2016 (Date of pronouncement)
DATE: March 14, 2016 (Date of publication)
AY: 1998-99
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CITATION:
S. 9(1)(vii)/ Article 12: “Startup services”, though technical in nature, are not assessable as “fees for technical services” u/s 9(1)(vii) if they do not involve any “construction, assembly mining or like projects”. The services are also not taxable under Article 12 as they do not “make available” technical knowledge

We are of the opinion that technical services or the start-up services, provided by the assessee, did not include any construction, assembly mining or like projects and therefore the payment received by it would not constitute FTS as per the provisions of the Act. Here, we would like to refer to the decision of the Hon’ble Madras High Court delivered in the case of Neyveli Lignite Corporation (243ITR459).In that case the assessee was engaged in the mining of lignite. It had entered in to an agreement with a Hungarian company for acquiring steam generating plant for more efficient running of its business. The AO held that income had accrued to Hungarian company in India and hence the Indian company was liable for deduction of tax. The Hon’ble court decided the issue in favour of the assessee and held that receipts could not be brought to tax in India, that the payments made by it were not taxable under the provisions of section 9 of the Act. (Ichikawajama-Harima Heavy Industries Ltd (288 ITR 408) referred)

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DATE: February 13, 2015 (Date of pronouncement)
DATE: February 16, 2015 (Date of publication)
AY: 2009-10
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CITATION:
S. 43(5): Transaction of call/put options in foreign currency are "derivatives" and loss suffered therein is not a "speculation" loss

“Derivatives” include foreign currency call option/ put option. These transactions are of derivative markets and cannot be termed as speculative in nature

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DATE: September 26, 2014 (Date of pronouncement)
DATE: October 4, 2014 (Date of publication)
AY: 2008-09
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CITATION:
The expenses like rent, depreciation, electricity, insurance charges, office maintenance and other miscellaneous expenses have no co-relation with the number of employees.

The assessee has used allocation key of employee head account. The expenses like rent, depreciation, electricity, insurance charges, office maintenance and other miscellaneous expenses have no co-relation with the number of employees. On the contrary, these expenses have a direct bearing to the revenue generation. …

Varian India Private Limited vs. Addl. DIT (ITAT Mumbai) Read More »