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. 92C : Transfer pricing-Arm’s length price-Re sale without any further value addition-Resale Price Method (RPM) is most appropriate method for determining ALP of said international transactions.
Topcon Sokkia India (P.) Ltd. v. DCIT(2020) 183 ITD 876 (Delhi) (Trib.)
S. 92C : Transfer pricing-Arm’s length price-Advance for allotment of shares-Notional interest-No addition could be made.
Voltas Ltd. v. ACIT (2020) 183 ITD 857 (Mum.)(Trib.)
S. 92C : Transfer pricing-Arm’s length price-Comparable-Software development-Software education- Computer related activities like maintenance of website for its clients and creation of multimedia presentation-Product companies-Functionally not comparable-High turnover filter-Directed to be excluded.
Xoriant Solutions (P.) Ltd. v. ITO (2020] 183 ITD 180 (Mum.) (Trib.)
S. 92C : Transfer pricing-Arm’s length price-AMP expenses-AE has not carried out any function in India-No international transaction in form of any agreement or arrangement on AMP expenditure incurred by assessee-Addition is held to be not justified. [S.92B]
PepsiCo India Holdings (P.) Ltd. v. DCIT (2020) 183 ITD 196 (Delhi)(Trib.)
S. 92C : Transfer pricing-Arm’s length price-Purchase product from AE and reseing to unrelated party-Resale price method (RPM) method was to be applied for benchmarking international transaction undertaken by assessee-Subvention payments by AE to reimburse part of operating expenses, said subvention amount received by assessee was operating in nature and was to be included as operating income-Promotion of Drug-Reimbursement of expenses-No transaction or international transaction could be said to be involved between assessee and its AE. [S.92B]
MSD Pharmaceuticals (P.) Ltd. v. DCIT (2020) 183 ITD 80 (Delhi) (Trib.)
S. 92C : Transfer pricing-Arm’s length price-Notional interest-Interest on loan at LIBOR + 200 bps is held to be appropriate. [S. 92B]
Bombay Rayon Holdings Ltd. v. ITO (2020) 183 ITD 91 (Mum.)(Trib.)
S. 90 : Double taxation relief-Foreign tax credit-FTC paid subsequent to filing of return was to be allowed.-DTAA-India-USA. [S. 9(1)(i), ITR 128, Art. 25]
Pricewaterhouse Coopers (P.) Ltd. v. ACIT (2020) 183 ITD 354 (Kol.)(Trib.)
S. 80JJAA : Employment of new workmen-Persons working in software industry could be said to be workmen who render technical services and not services in the nature of supervisory or management character-Electronic design automation (FDA) software license First year of employment-Employees had worked for more than 300 days during relevant assessment years.
Texas Instruments (India) (P.) Ltd. v. ACIT (2020) 183 ITD 7 / 195 DTR 347 / 207 TTJ 586 (Bang.)(Trib.)
S. 80IB(10) : Housing projects-Building competition certificate-Mere delay in issuing competition certificate-Exemption cannot be denied-Inner measurements of a residential unit as well as projection or balcony would form part of built-up area-Within a composite housing project, where there are eligible and ineligible units, assessee can claim proportionate deduction in respect of eligible units-Higher GP rate cannot be a sole decisive factor for declining an assessee’s claim of deduction-Period during which lockdown was in force in view of COVID-19 pandemic, would stand excluded for purpose of working out time limit for pronouncement of orders, as envisaged in rule 34(5). [S. 255, ITAT R. 34(5)]
Harshvardhan Constructions v. ITO (2020) 81 ITR 299/183 ITD 497 / 207 TTJ 663 (Mum.)(Trib.)
S. 80IA : Industrial undertakings-Infrastructure development-Initial assessment year-Not required to reduce losses arising from eligible business which was already set off against other business income. [S. 70, 71, 72, 80IA(5)]
DCIT v. Chhotabhai Jethabhai Patel & Co. (2020) 183 ITD 603 (Ahd.)(Trib.)