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.92B: Transfer pricing – International transaction – Termination of option rights under an agreement can be treated as a “deemed international transaction”- Transfer pricing provision was held to be applicable and addition was held to be justified . Transfer of its unexercised call option right to nominate is held to be liable to capital gain tax . [ S. 2(47),92C ,92F]
Vodafone India Services Pvt. Ltd. v. DCIT( 2018) 169 ITD 345/ 168 DTR 257/ 192 TTJ 105 ( Ahd)(Trib) www.itatonline.org
S. 92CA: Reference to transfer pricing officer – CBDT’s Instruction No. 3/2003 is binding on the AO. Consequently, the ALP of international transactions where the quantum is less than Rs. 5 crore has to be determined by the AO and cannot be referred to the TPO. If such reference is made, it is invalid and the extended time for completing the assessment is not available to the AO. The assessment is void as it is time-barred [ S.119, 144C ]
Calance Software Pvt. Ltd. v. DCIT ( 2018) 92 taxmann.com 164( Delhi)(Trib) , www.itatonline.org
S.92C: Transfer pricing – Arm’s Length Price – Difference in function performed and risk undertaken – Difference in brokerage charged to related and un related parties –Deletion of addition was held to be justified
CIT v. J.P.Morgan India ( P) Ltd ( 2018) 161 DTR 398/ 304 CTR 686 ( Bom) (HC)
S.92C: Transfer pricing – Arm’s Length Price – Corporate guarantee- When no expenditure was incurred for providing guarantee to bank for the loan given to subsidiaries applying the rate of 2.5% by the TPO was held to be not justified .
CIT v. Reliance Industries Ltd ( 2018) 161 DTR 420 /( 2019) 410 ITR 468 ( Bom) (HC)Matter remanded to High Court, CIT v. Reliance Industries Ltd ( 2019) 410 ITR 466 /175 DTR 1/ 307 CTR 121 (SC)
S.92C:Transfer pricing – Arm’s length price –Method of accounting – TPO has no jurisdiction to comment on the method of accounting followed by an assessee. [ S.145 ]
DCIT v. Hazaria Cryogenic Engineering & Construction Management (P.) Ltd. (2018) 168 ITD 344 (Mum) (Trib.)
S.92C: Transfer pricing – Arm’s length price- The TPO can not sit in judgement over the business model of the assessee and determine the ALP of the transactions with AEs at Nil .
Eaton Fluid Power Ltd v. ACIT (Pune) (Trib) , www.itatonline.org
S. 92: Transfer pricing -International transactions — Arm’s length price — Transaction of sale of shares in Indian company to be benchmarked under transfer pricing provisions. [S. 92A to 92F ]
AB Holdings, Mauritius-Ii, In re. (2018) 402 ITR 37 / 163 DTR 225 (AAR)
S. 92: Transfer pricing -International transactions — Arm’s length price — Transaction of sale of shares in Indian company to be benchmarked under transfer pricing provisions. [S. 92A to 92F ]
“AB” Mauritius, In re (2018) 402 ITR 311/ 163 DTR 170 (AAR)
S. 90: Double taxation avoidance -Income deemed to accrue or arise in India – Capital gains-Transfer of shares by German individuals to German Company – Not liable to deduct tax at source-DTAA-India – Germany . [ S. 45, 90 , 195 , Art, 13 ]
GEA Refrigeration Technologies Gmbh, In re. (2018) 401 ITR 115 / 163 DTR 145 301 CTR 167 (AAR)
S. 90: Double taxation relief – Non –resident – Assessee is not operating as independent entity-Assessee is not entitled to benefit of double taxation avoidance agreement between India and Mauritius.- Transaction was held to be liable to tax in India and tax to be with held – DTAA-India –Mauritius- USA [S. 195, Art. 13 ]
“AB” Mauritius, In re (2018) 402 ITR 311/ 163 DTR 170 (AAR)