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, www.itatonline.org and other journals
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S. 115-O: Company-Dividend distribution tax-Payment of dividend to non-resident shareholder-Dividend distribution tax payable by company at rate under section 115-O, not at rate applicable to non-resident shareholder under Double Taxation Avoidance Agreement, unless contracting States by specific provision extend treaty protection to domestic company. [S. 90]
Schaeffler India Ltd. v. Asst. CIT (2025) 131 ITR 237 (Ahd.)(Trib)
S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Corporate guarantee-Rate limited to 0.60 per cent. In assessee’s own case for earlier year-Same rate sustained for all corporate guarantees-Income-Higher turnover reported in service tax return, including mobilisation advances from customers, treated as income by Assessing Officer-Advances not taxable as income-Appeal-Power of appellate authorities-Claim raised for first time before appellate authorities can be considered-Remitted to Assessing Officer for statistical purposes.[S. 4, 250]
KEC International Ltd v.Dy. CIT (2025) 131 ITR 450(Mum) (Trib)
S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Selection of comparables-Companies included by assessee itself in final list, later sought to be excluded on functional difference/turnover filter-Functional similarity established-Turnover difference not sufficient for exclusion-Interest on outstanding receivables constitutes international transaction-Rate depends on currency of denomination-Remanded for reconsideration-Employees’ contribution to provident fund-Belated remittance not deductible even if paid before due date of filing return [S. 2(24)(x), 36(1)(va), 92CA, 139(1)]
Oakton Global Technology Services Centre (India) P. Ltd v ITO (2025) 131 ITR 418 (Hyd.)(Trib)
S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Selection of comparables-Related-party transactions ratio to be applied consistently on aggregate basis, 15 per cent. filter appropriate-Functionally different companies without segmental data to be re-verified-Companies with unreliable export data excluded-Negative net worth not a factor for rejection if functions, assets and risk analysis acceptable-Functionally similar companies satisfying export turnover filter to be included-Matter remitted for company-wise functions, assets and risk analysis-OECD guidelines to be followed for broad comparability-Working capital adjustment affecting net profit margin to be allowed-Inadvertent wrong reckoning by Assessing Officer-Rectification application pending-Assessing Officer directed to carry out rectification. [S.92CA, 154]
Metric Stream Infotech (India) P. Ltd v. Asst. CIT (2025) 131 ITR 310 (Bang.) (Trib.)
S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Most appropriate method-Royalty-Department adopting comparable uncontrolled price method-Tribunal in assessee’s own case for earlier year holding transactional net margin method most appropriate-Assessee’s use of same method justified-Payment of management fees to associated enterprise-Identical payment accepted by Transfer Pricing Officer in earlier years-Facts similar in current year-Payment held to be at arm’s length.[S.92CA]
Schaeffler India Ltd. v. Asst. CIT (2025) 131 ITR 237 (Ahd)(Trib)
S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction Management support services-Fresh evidence filed before Tribunal-Matter remanded for examination by Transfer Pricing Officer.[S.92CA]
Asst. CIT v. Kerry Indev Logistics P. Ltd (2025) 131 ITR 100 (Chennai) (Trib)
S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-While benchmarking specified domestic transactions, the TPO cannot cherry-pick only low-priced products from a basket of products for determining ALP-Where TNMM is accepted as the Most Appropriate Method in the subsequent year, the supplementary TP study adopting TNMM ought to be considered. [S. 92BA]
Aurobindo Pharma Ltd. v. Asst. CIT (2025) 131 ITR 15(Hyd)(Trib.)
S. 90: Double taxation relief-Foreign Tax Credit-FTC cannot be denied merely because Form No. 67 was filed after the due date under section 139(1), where it was furnished before completion of assessment-Requirement under Rule 128(9) is directory and not mandatory. [S., 91, 143(1), R. 128(9)]
Ashish Sood v. Dy. CIT (2025) 131 ITR 436 (Chd)(Trib.)
S. 80IA: Industrial undertaking-Special deduction-Container freight station approved and notified as infrastructure facility-Deduction allowable.[S.80IA(4)]
Asst. CIT v. Kerry Indev Logistics P. Ltd (2025) 131 ITR 100 (Chennai) (Trib)
S. 69B: Unexplained investment-Survey-Excess stock found during survey of business premises-Surrendered in return as business income-No independent source of investment shown-Business being sole source of income-Survey at business premises, no books impounded, no reasons recorded-Deeming provision not attracted-Excess stock taxable as business income. [S. 28, 115BBE, 133A]
Nikhaar Fashions v. Asst. CIT (2025) 131 ITR 1 (Jaipur)(Trib)