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-Avoidance of tax-International transaction-Back-Office services-Comparables-Companies functionally different from assessee being routine back-office service provider is to be excluded-Company earning profit in any one of three years can be treated as comparable-Matter remanded for verification of financial statements-Transfer Pricing Officer is bound to follow directions in letter and spirit-Deferred receivables-Interest rate in terms of Libor Plus a mark-up of two hundred basis points to be considered.[S.92CA]
Swiss Re Global Business Solutions India P. Ltd. v. Add. CIT (2023)107 ITR 381 (Bang) (Trib)
S. 92C : Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Calculation of margins-Allocation of employee cost-Not proper-Selection of comparables-Turnover filter-Companies failing turnover filter up to Rs. 200 Crores to be excluded–Working capital adjustment mandatory requirement if assessee is able to provide reasonable and accurate data of comparable companies-Interest on delayed receivables to be benchmarked separately-Directed for adjustment afresh after applying six months’ Libor plus 300 basis points with mark-up of 100 basis points. [S.92CA]
Quest Global Engineering Services P. Ltd. v.ACIT (2023)107 ITR 546 (Bang) (Trib)
S. 92C : Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Reimbursing of expenses-No element of profit-Ad hoc adjustment recommended at 10 Per Cent. of expenses is not permissible-Late deposits of employees’ contribution to provident fund and employees’ State Insurance Corporation is not allowable. [S. 37(1), R.10B]
Ness Digital Engineering (India) P. Ltd. v. Add. CIT (2023)107 ITR 584 (Mum) (Trib)
S. 80IB : Industrial undertakings-Search and seizure-Manufacturing expenses-Bogus purchases-Statement retracted Customs, Excise and Service Tax Appellate Tribunal holding that the assesses engaged in genuine purchases and manufacturing activities-Entitled to deduction.[S.153A]
Asst. CIT v. Ambika International (2023)107 ITR 8 (SN)(Delhi)(Trib) Asst. CIT v. Jay Ambet Aromatics (2023)107 ITR 8 (SN)(Delhi)(Trib) Asst. CIT v. Shiva Mint Industries (2023)107 ITR 8 (SN)(Delhi)(Trib)
S. 80IA : Industrial undertakings-Enterprises engaged in infrastructure development-Developer and contractor-Work of irrigation project and construction and development of road-Not works contractor but developer undertaking projects of Infrastructure Facility-Organisations awarding contracts were 100 Per Cent. owned by State Government-Entitle to deduction-Interest income-Only net interest income to be excluded.[S.80-IA(4A), 80IA(13)]
Asst. CIT v. Montecarlo Construction Ltd. (2023)107 ITR 411 (Ahd) (Trib)
S. 69B : Amounts of investments not fully disclosed in books of account-Survey-Payment in cash purchase of land-Addition is made in the hands of director-Addition cannot be made in the hands of the company.[S.133A]
Pravinchandra R. Patel v. Dy. CIT (2023)107 ITR 34 (SN) (Ahd.)(Trib.) Ansuben P.Patel (Smt) v. Dy. CIT (2023)107 ITR 34 (SN) (Ahd.)(Trib.) Neothech Education Foundation v. Dy. CIT (2023)107 ITR 34 (SN) (Ahd.)(Trib.)
S. 69B : Amounts of investments not fully disclosed in books of account-Excess stock-Survey-Amount cannot be treated as unexplained investment-Taxable as business income.[S.133A]
Overseas Leathers v. Dy. CIT (2023)107 ITR 688 (Chennai) (Trib)
S. 68 : Cash credits-Remittance from its Singapore based holding company-Source of the source not required to be proved-Addition is not justified.
Asst. CIT v. Experion Hospitality P. Ltd. (2023)107 ITR 22 (SN)(Delhi)(Trib)
S. 68 : Cash credits-Agricultural income-Agricultural income is not disputed-Cash deposits cannot be assessed as cash credits. [S.10(1)]
Chandubhai Ramjibhai Kathiriya v. CIT (2023)107 ITR 54 (SN)(Rajkot) (Trib)