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
Click here to download the pdf versions of the Digest of case laws

S. 92C : Transfer pricing-Arm’s length price-Comparable-A company engaged in distribution of software product could be accepted as valid comparable.

Sony Pictures Networks India (P.) Ltd. v. DCIT (2020) 184 ITD 794 (Mum.)(Trib.)

S. 92C : Transfer pricing-Arm’s length price-TNMM method-constantly accepted to be Most Appropriate Method-TNMM would be appropriate methodology-Corporate guarantee-Spread rate would be applied to gross amount of guarantee, and not on actual loan availed by AE.

Omni Active Health Technologies Ltd. v. ACIT (2020) 184 ITD 714 (Mum.)(Trib.)

S. 92C : Transfer pricing-Arm’s length price-Volume difference in transaction values, funding issues, environmental issues, geographical location of clients and alleged differences in FAR without specifying same were held not grounds to reject CPM method and adopt TNMM method in oil and gas sector-Appellate Tribunal-Period of 90 days for pronouncement of orders after date of hearing is to be computed by excluding period during which nationwide COVID 19 pandemic lockdown was in force. [S. 255, ITAT R. 34]

Mott MacDonald (P.) Ltd. v. CIT (2020) 184 ITD 656 / 190 DTR 21 / 206 TTJ 30 (Mum.)(Trib.)

S. 92C : Transfer pricing-Arm’s length price-Comparable- Development of software products, was to be excluded from list of comparables-Bigger sized company having large turnover was to be excluded from the list of comaparbles.

Capgemini Technology Services India Ltd. v. DCIT (2020) 184 ITD 393 (Pune)(Trib.)

S. 92C : Transfer pricing-Arm’s length price-Turnover-Companies having higher turnover can be held to be comparable Risk management-TPO was to be directed to re-compute risk adjustment in accordance with law-A company rendering software development services and licensing and earning royalty of software products cannot be held to be comparable in absence of segmental details-A company engaged in diverse field of activities of software development could not be regarded as functionally comparable with assessee-A company had undergone acquisition which was an extraordinary event that would impact profits for year under consideration, this company could not be considered as comparable-Comparable companies available in public domain was insufficient assessee cannot be required to produce the evidence, the revenue can compel production of required details from comparable companies by issuing notice under section 133(6) of the Act. [S. 133(6)]

Marlabs Innovations (P.) Ltd. v. ACIT (2020) 184 ITD 289 (Bang.)(Trib.)

S. 92C : Transfer pricing-Arm’s length price-Guarantee commission was to be charged at rate of 0.50 per cent in respect of corporate guarantee-Interest-Commercial expediency of loan is wholly irrelevant in ascertaining ALP of interest on said loan advanced to AE.

Laqshya Media Ltd. v. DCIT (2020) 184 ITD 143 (Mum.)(Trib.)

S. 92C : Transfer pricing-Arm’s length price-Comparison-Data should be of same financial year-Delay of 47 days in filing appeal by the revenue was condoned. [S. 253]

Firemenich Aromatics (I) (P) Ltd. v. ACIT (2020) 184 ITD 43 (Mum.)(Trib.)

S. 92B : Transfer pricing-Corporate guarantee-No material to prove cost in providing corporate guarantee-Addition is held to be not valid-Finance Act, 2012, amendment is prospective. [S. 92C]

ACIT v. Spentex Industries Ltd. (2020) 184 ITD 695 (Delhi)(Trib.)

S. 92A : Transfer pricing-Associated enterprises-Advance of loan-None of said two entities had individually advanced loan of more than 51 per cent of book value of total assets of assessee-Entities could not be deemed as AEs of assessee. [S. 92A(2)(c), 92C]

Soveresign Safeship Management (P.) Ltd. v. ITO (2020) 184 ITD 806 / 195 DTR 337 / 208 TTJ 754 (Mum.)(Trib.)

S. 80P : Co-operative societies-Source of investment by co-operative society-Revenue is not required to look to nature of investment whether it is from surplus funds or otherwise. [S. 80P(2)]

Mantola Co-operative Thrift & Credit Society Ltd. v. ITO (2020) 184 ITD 136 (Delhi)(Trib.)