This Digest of case laws is prepared by KSA Legal and AIFTP from judgements reported in BCAJ, CTR, DTR, ITD, ITR, ITR (Trib), Chamber's Journal, SOT, Taxman, TTJ, BCAJ, ACAJ, and other journals
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S. 9(1)(v) : Income deemed to accrue or arise in India – Interest-Bank is a subsidiary of Netherlands company — Interest paid by Indian branch not taxable in hands of head office or overseas branches — Change of law with effect from 1-4-2016 not be applicable prior to ay 2016-17-DTAA-India-Netherlands [Art. 11(2)]

Dy. CIT (IT) v. Co-Operative Rabobank U. A. (2023) 152 295 / 103 ITR 89 (SN)(Mum) (Trib)

S. 9(1)(v) : Income deemed to accrue or arise in India – Interest-Hypothetical independence of PE and the head office cannot be extended to computation of profit of the head office and the same is restricted only for computation of profit attributable to PE-DTAA-India – Switzerland.[Art. 7(2), 11]

Credit Suisse AG v. DCIT (2023) 103 ITR 38 (Trib) (SN) (Mum)(Trib)

S. 9(1)(ii) : Income deemed to accrue or arise in India – Salaries-
Short term assignment – Service rendered USA-Salaries received in India-Not taxable in India-DTAA-India-USA [S. 5(2)(a) 5(2)(b), 90 Art. 16]

Prasanth Nandanuru v. ITO (IT)(2023) 200 ITD 596/ 225 TTJ 110 (Hyd)(Trib)

S. 9(1)(i) : Income deemed to accrue or arise in India-Business connection-licensing of software in India through distributors to end users-Transaction between the assessee and its Indian PE was at arm’s length therefore, no further attribution of profit could be made to dependent agent PE in India.[S. 92C]

Adobe Systems Software Ireland Ltd v. ACIT (IT) (Delhi) 201 ITD 77(Delhi)(Trib)

S. 9(1)(i) : Income deemed to accrue or arise in India-Business connection-Sales transaction on principal-to-principal basis for resale-transaction between parties was accepted to be at arm’s length by TPO-attribution of profit to PE in India could not be sustained – DTAA-India – Singapore.[Art. 5(8), 5(9)]

AB Sciex Pte Ltd v. ACIT (Delhi)(Trib) (UR)

S. 9(1)(i) : Income deemed to accrue or arise in India-Business connection-DRP cannot invoke provisions of section 44BB without any good and sufficient reason while departing from methodology adopted by revenue in respect of attribution of profit to PE on receipts from offshore supply of equipment in past assessment years-DTAA-India – Singapore .[S.44BB, Art,6,7]

Vetco Gray Pte. Ltd. v DCIT (2023) 200 ITD 277/(2024) 109 ITR 521 (Delhi)(Trib)

S. 5 : Scope of total income-Passing of entries in books of account not conclusive to determine income-Entries in books representing notional income – Notional income is not taxable.[S. 145]

ACIT v. Gravita Metal Inc. [2023] 105 ITR 10(SN) (Amritsar) (Trib)

S. 4 : Charge of income-tax-Capital or revenue receipt-Entertainment tax subsidy is capital receipt not exigible to tax. [S. 28(i)]

ACIT v. Inox Leisure Ltd. [2023] 105 ITR 3 (SN) (Ahd) (Trib)

S. 4 : Charge of income-tax-Subsidy-Technology up gradation fund scheme-Capital in nature though net off against the interest expenditure in the books of account is still capital in nature and therefore not taxable. [S. 28(i)]

Dy. CIT v. Grasim Industries Ltd. (2023) 201 ITD 641 (Mum)(Trib.)

S. 2(24)(xviii) : Income-Assistance in the form of a subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement-Subsidy was given to setting up a new biomass co-generation system or to promote existing systems and its benefits – Capital subsidy – Directed to reduce from cost of asst acquired out of said subsidy and allow depreciation.[S. 4, 32, 43 (1)

Manali Petrochemical Ltd. v. Dy. CIT (2023) 201 ITD 317 (Chennai)(Trib.)