NEWS

 DIRECT TAX

1. CBDT clarified that an assessee is entitled to claim set-off of loss against income determined under section 115BBE of the Act till the assessment year 2016-17.

[Ref: Circular no 11/2019 [F.NO.225/45/2019-ITA.II], Dated 19-6-2019]

2. CBDT issues revised guidelines for compounding of offences under Direct Tax Laws

[Ref:-Circular F. No. 285/08/2014-IT (INV.V)/ 147, DATED 14-6-2019]

3. FM Nirmala Sitharaman raises serious issues related to digital tax at G20 finance ministers meeting

4. G20 Finance Ministers agree to introduce ‘Digital Tax Rules’ for tech giants by 2020.

5. CBDT issues direction to AO for making ‘Assessment of Firms’.

6. 702 start-ups have been exempted from Angel Tax provisions till June 21, 2019: Ministry of Commerce & Industry

7. reduces interest rates for small savings schemes by 0.10%.

OECD

1. OECD releases international exchange framework for CRS-related mandatory disclosure rules and updates its XML schemas for the exchange of CRS, CbC and tax ruling information

2. India deposits its instrument of ratification for the Multilateral BEPS Convention

3. Morocco signs landmark agreement to strengthen its tax treaties.

4. OECD expands functionality of MLI Matching Database to include information on entry into effect.

5. Russian Federation deposits its instrument of ratification for the Multilateral BEPS Convention.

6. OECD expands transfer pricing country profiles to cover 55 countries.

7. OECD launches new handbook to strengthen tax administrations’ capacity to support the fight against money laundering and terrorist financing.

8. Serbia joins international efforts against tax evasion and avoidance.

DOMESTIC TAX CASE LAWS

SUPREME COURT

1. Where High Court upheld Tribunal’s order holding that advertisement expenses incurred by assessee being revenue in nature were eligible for deduction under section 37(1), SLP filed against decision of High Court was to be dismissed. [Pr. CIT v Matrix Cellular International Service (P.) Ltd [2019] 106 taxmann.com 126 (SC)]

2. SLP dismissed against High Court ruling that section 226(3)(x) does not confer arbitrary power on Income-tax department to recover amount of tax liability of mining department from innocent assessee who was awarded tender for settlement of sand ghats by Mining department. [Pr. CCIT v Sainik Food (P.) Ltd. [2019] 106 taxmann.com 112 (SC)]

3. Where High Court upheld Tribunal’s order allowing assessee’s claim for deduction under section 80G by holding that for last three years details had been provided to show that charitable activities were being carried on and, moreover, registration under section 12A continued in favour of assessee, SLP filed against decision of High Court was to be dismissed. [CIT v Babbar Charitable Trust [2019] 106 taxmann.com 160 (SC)]

4. SLP granted against High Court ruling that Commissioner is not authorized under section 12AA(3) to cancel registration of charitable trust retrospectively. [Asst. CIT v Agra Development Authority [2019] 106 taxmann.com 111 (SC)]

5. SLP filed against High Court’s order allowing assessee’s application for stay subject to payment of 10 per cent of tax demand, was to be dismissed. [Popular Traders v Asst. CIT [2019] 106 taxmann.com 89 (SC)]

6. Where High Court set aside Tribunal’s order deleting penalty imposed under section 271C by taking a view that there were regular delays on part of assessee in depositing tax deducted at source with Central Government for which no reasonable explanation was offered, SLP filed against said decision was to be granted. [Eurotech Maritime Academy (P.) Ltd. v CIT [2019] 106 taxmann.com 87 (SC)]

7. SLP dismissed against High Court ruling that where High Court had already set aside reassessment proceedings for relevant assessment year on one issue, there was no warrant for issue of further notice under section 148 on another ground. [ CIT v Rallis India Ltd. [2019] 106 taxmann.com 54 (SC)]

8. Where Commissioner passed a revisional order making addition to assessee’s income under section 69A in respect of on-money receipts, however, said order was set aside by Tribunal holding that AO had made detailed enquiries in respect of on-money receipts and said view was also confirmed by High Court, SLP filed against decision of High Court was to be dismissed. [Pr. CIT v Shree Gayatri Associates  [2019] 106 taxmann.com 31 (SC)]

9. Where High Court upheld Tribunal’s order allowing assessee’s claim for exemption under section 10AA on ground that only a part of capital was received from a partner’s proprietorship concern and huge amount of fresh capital had also been introduced and, thus, it was not a case of reconstruction of business, SLP filed against said order was to be dismissed. [Pr. CIT v Green Fire Exports [2019] 106 taxmann.com 33 (SC)]

10. LP dismissed on ground of delay against High Court ruling that where assessee entered into an agreement for road development project with Gujarat State Road Development Corporation (GSRDC), in view of fact that GSRDC was a Government agency as defined under section 2(e) of Gujarat Infrastructure Development Act, 1999 and, moreover, it was totally controlled by State Government, claim for deduction under section 80-IA could not be rejected on ground that assessee failed to fulfil conditions of clause (b) of sec. 80-IA (4). [CIT v Ranjit Projects (P.) Ltd. [2019] 105 taxmann.com 126 (SC)]

11. SC granted SLP against HC’s ruling upholding validity of provisions of sec. 80-IC & 115JB. [S.B.L. (P.) Ltd. v CIT [2019] 105 taxmann.com 316 (SC)]

12. Where High Court upheld Tribunal’s order holding that activities of assessee were covered by section 2(15) and, thus, assessee’s claim for accumulation of income under section 11(2) was to be allowed, SLP filed against said order was to be granted. [CIT v Ahmedabad Urban Development Authority [2019] 105 taxmann.com 310 (SC)]

13. Where High Court held that question raised by revenue to effect that as to whether Tribunal’s order was to be treated as void-ab-initio in light of third proviso to section 254(2A) which provided that stay of demand would stand vacated after expiry of a period of 365 days, even if delay in disposal of appeal was not attributable to assessee, was not a substantial question of law, SLP filed against order of High Court was to be dismissed. [Pr. CIT v BMW India (P.) Ltd. [2019] 105 taxmann.com 136 (SC)]

14. Where High Court upheld Tribunal’s order deciding issue of levy of interest under section 234B in assessee’s favour merely on basis of its earlier order passed in another case, SLP filed against said decision of High Court was to be granted. [CIT v Shanghai Electric Group Co. Ltd. [2019] 105 taxmann.com 312 (SC)]

15.Where High Court upheld Tribunal’s order deleting addition as well as penalty on ground that excess stock existed only on account of wrong entries in assessee’s books of account and not due to purchases made outside books of account, SLP filed against decision of High Court was to be dismissed. [Pr. CIT v Deccan Mining Syndicate (P.) Ltd. [2019] 105 taxmann.com 278 (SC)]

16. Where High Court disposed of assessee’s petition by directing him to avail alternative remedy of appeal, SLP filed against said order was to be dismissed. [Mahesh Kumar Agarwal v Pr. CIT [2019] 105 taxmann.com 273 (SC)]

17. Where High Court upheld Tribunal’s order holding that AO could not straightaway reject expenditure offered for disallowance under section 14A and apply rule 8D without assigning any reasons, SLP filed against said decision was to be dismissed. [Pr. CIT v Moonstar Securities Trading and Finance Co. (P.) Ltd. [2019] 105 taxmann.com 275 (SC)]

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HIGH COURT

1. HC upholds tax demand of Rs. 2,500 crores as issue of notice before making demand u/s 115-O not required. [Cognizant Technology Solutions India (P.) Ltd. v Dy. CIT [2019] 106 taxmann.com 388 (Madras)]

2. Where tax effect by virtue of order passed by Tribunal was below Rs. 50 lakhs in assessee’s case, in view of mandate issued by CBDT in circular No. 3, dated 11-7-2018, appeal filed by revenue before HC was to be dismissed on ground of low tax effect. [Pr. CIT v Hotel Leela venture Ltd. [2019] 106 taxmann.com242 (Bombay)]

3. Where assessee filed an application under section 245C(1) making full and true disclosure of income and same was admitted to be proceeded with by Settlement Commission under section 245D(1), in such a case, Settlement Commission could have either rejected said application or it could have directed Principal Commissioner or Commissioner to enquire and submit report so as to enable to Commission to take a decision, however, Settlement Commission could not relegate matter to Assessing Officer to dispose of assessee’s case on merits. [Samdariya Builders (P.) Ltd. v IT SetCom [2019] 106 taxmann.com 189 (Madhya Pradesh)]

4. Where assessee oil exploration company had no choice but to surrender oil blocks as Government of India refused to extend contract period for oil exploration, act of assessee to hand over oil blocks before commencement of commercial production would be treated as ‘surrender’ for claiming deduction of oil exploration expenditure under section 42(1)(a). [Pr. CIT v Hindustan Oil Exploration Company Ltd. [2019] 106 taxmann.com 117 (Bombay)]

5. Where in course of appellate proceedings against order holding assessee liable to deduct tax under section 195, department issued notices under sections 201(1) and 201(1A), in view of fact that assessee had kept a sum of Rs. 10 Million US Dollars in escrow account which would be by and large sufficient to meet with its TDS requirement if ultimately so arose, notices issued to assessee under sections 201 and 201(1A) would stand stayed during pendency of proceedings. [Business Process Outsourcing, LLC v AAR (IT) [2019] 106 taxmann.com 146 (Bombay)]

6. HC quashes reassessment initiated after 6 years to disallow deduction of programme rights claimed by ‘Asianet’. [Asianet Star Communications (P.) Ltd. v Asst. CIT [2019] 106 taxmann.com 293 (Madras)]

7. Where computer system of Income-tax Department could not rectify duplication of entry in old TAN and new TAN resulting in TDS mismatch, department could not withhold refund payable to assessee. [Vodafone Idea Ltd. v Dy. CIT [2019] 106 taxmann.com 22 (Bombay)]

8. Where Assessing Officer concluded re-assessment before assessee could file objections to reasons recorded, and since assessee was not provided breathing time to furnish preliminary objections, re-assessment order was to be set aside. [Mrs. Kanchan Agarwal v ITO [2019] 106 taxmann.com 23 (Karnataka)]

9. Where assessee made disclosure of undisclosed income in statements recorded under section 132(4) during course of search and had also specified manner in which such income was derived but paid tax in respect of such income belatedly, since there is no time frame prescribed for payment of tax in Explanation 5(2) to section 271(1)(c), assessee was entitled to immunity from penalty under section 271(1)(c). [Duraipandi & S. Thalavaipandian AOP v Asst. CIT [2019] 106 taxmann.com 20 (Madras)]

10. Merely because housing complex was situated on a piece of land which was occupied by Co-operative Housing Society under a long term lease, would make no difference while considering assessee’s claim for deduction under section 54 in respect of capital gain arising from sale of flat in said society. [Pr. CIT v Rahul Uday Tuljapurkar [2019] 106 taxmann.com 66 (Bombay)]

11. Unpaid consideration on sale of flat to shareholder to be treated as deemed dividend u/s 2(22)(e). [Bhagavathy Velan v Dy. CIT [2019] 106 taxmann.com 67 (Madras)]

12. Finance Act, 2015 amendments to sec. 153C would apply to search initiated on or after June 1, 2015. [Anil Kumar Gopikishan Agrawal v Asst. CIT [2019] 106 taxmann.com 137 (Gujarat)]

13. Where Assessing Officer rejected assessee’s claim for carry forward of loss on ground that return was not filed within time prescribed under section 139(1) and, thereupon Tribunal directed assessee to seek condonation of delay in filing return from CBDT, in view of fact that assessee did not file application for condonation of delay even before CBDT within permissible time limit, impugned order passed by CBDT rejecting assessee’s application on ground of limitation and latches, did not require any interference. [Ganesh Sahakari Bank Ltd. v GOI [2019] 106 taxmann.com 62 (Bombay)]

14. No disallowance u/s 14A if AO failed to prove that interest free funds were utilised to earn exempt income. [Pr. CIT v Ashok Apparels (P.) Ltd. [2019] 106 taxmann.com 63 (Bombay)]

15. Where main object of assessee golf club was to provide golf facilities to its members for promotion of this sport and there was no element of activity of assessee club being in nature of trade, commerce or business, then interest earned from banks or financial institutions on investment of surplus funds arising from charitable activities was exempted from tax. [CIT v Bombay Presidency Gold Club Ltd. [2019] 106 taxmann.com 58 (Bombay)]

16. Assessee corporation set up for formulating and executing housing scheme for benefit and welfare of employees of Police department, Government of Arunachal Pradesh, was not eligible for exemption under section 10(26B) because all persons of Police Department could not be considered as belonging to Scheduled Castes, Schedule Tribes or other backward classes. [Arunachal Police Housing And Welfare Corporation Ltd. v CIT [2019] 106 taxmann.com 53 (Gauhati)]

17. Where Commissioner passed a revisional order making addition to assessee’s income under section 68 in respect of amount deposited in bank account, in view of fact that said amount represented sale consideration of goods in support of which assessee had produced statement of bank account, copies of bills issued to purchasers as also books of account showing entries of deposits made in bank, impugned revisional order was to be set aside. [Pr. CIT v Dilip Kumar Swami [2019] 106 taxmann.com 59 (Rajasthan)]

18. Where revenue challenged impugned order passed by Settlement Commission under section 245D(2C) on ground that same was passed without passing an order under section 245D(3) requiring a further enquiry into certain transactions of assessee, since department had not set out any grounds and reasons why in facts of case, such enquiry or investigation as envisaged under section 245D(3) was necessary, impugned order passed under section 245D(2C) was justified. [Pr. CIT v Income Tax Settlement Commission [2019] 106 taxmann.com 12 (Bombay)]

19. Where issue of refund order was not delayed for any period attributable to assessee, Tribunal was correct in allowing interest to assessee in terms of section 244A(1)(a) Just because the assessee had raised a belated claim during the course of the assessment proceedings which resulted into delay in granting of refund, it couldn’t be said that refund have been delayed for the reasons attributable to the assessee and assessee wasn’t entitled to interest for the entire period from the first date of assessment year till the order giving effect to the appellate order was passed. [CIT v Melstar Information Technologies Ltd. [2019] 106 taxmann.com 142 (Bombay)]

20. Merely because there was an agreement between Assessee Company and related party in which one of directors had substantial interest, same could not be allowed in absence of genuineness of transaction. [Patterson & Co. (P.) Ltd. v Dy. CIT [2019] 105 taxmann.com 150 (Madras)]

21. Where Assessing Officer did not apply mind to correctness of books of account produced before her except to note that books of account were produced and test checked, impugned revisional order passed under section 263 was to be upheld. [Pr. CIT v Venus Woollen Mills, Ludhiana [2019] 105 taxmann.com 287 (Punjab & Haryana)]

22. Where Commissioner passed a revisional order giving certain directions to Assessing Officer to modify assessment in a particular way, impugned notice issued after expiry of eight years to carry out such directions was barred by limitation under section 153(3) on account of unreasonable delay. [GE T & D India Ltd. v Dy. CIT [2019] 105 taxmann.com 286 (Madras)]

23. Where property was mortgaged by assessee after he had acquired property, amount paid by assessee to discharge mortgage debt by sale of said property could not be treated as cost of acquisition so as to allow same as deduction under section 48. [Tmt. D. Zeenath v ITO [2019] 105 taxmann.com 298 (Madras)]

24. Where assessee had taken a building on lease and incurred expenditure towards interior improvement and further construction of two floors of said building, impugned expenditure incurred by assessee had brought enduring benefit; therefore, same was capital in nature and would come within mischief of Explanation 1 to section 32(1). [CIT v Viswams [2019] 105 taxmann.com 289 (Madras)]

25. Where assessee could not explain allotment of shares in excess of authroised capital where there was no SEBI approval for same and assessee could also not justify premium of 457 per cent over face value of shares and also genuineness of transaction and creditworthiness of individual providing money, reassessment notice was justified. [Max Ventures Investments Holdings (P.) Ltd. v ITO [2019] 105 taxmann.com 124 (Delhi)]

26. Search warrant is invalid if provisions of section 132 not attracted; HC quashes search proceedings. [Laljibhai Kanjibhai Mandalia v Pr. DIT [2019] 105 taxmann.com 260 (Gujarat)]

27. Where by non-speaking order Revenue rejected petitioner’s application for stay on demand which was contrary to orders of appellate authorities in preceding years and, further, without issuing any reasonable notice, withdrew certain amount from provisionally attached bank account of assessee towards adjustment against demand for other years, action of Revenue was high handed and manifestly unfair towards petitioner. [Milestone Real Estate Fund v Asst. CIT [2019] 105 taxmann.com 292 (Bombay)] 

28. Where mortgage was created by assessee much before a demand was made under rule 2 of second schedule and even before an order of assessment was passed, said mortgage did not become automatically void under section 281(1). [ICICI Bank Ltd. v TRO [2019] 105 taxmann.com 257 (Andhra Pradesh and Telangana)]

29. On retirement, allotment to retiring partner of his share in assets of partnership firm after deduction of liabilities is not transfer within meaning of section 2(47) so as to assess capital gains under section 45(4). [National Company v Asst. CIT [2019] 105 taxmann.com 255 (Madras)]

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INCOME TAX APPELLATE TRIBUNAL

1. Where assessee assigned its loan obligation to a third party by making a payment in terms of present value of future liability, surplus resulting from assignment of loan was not cessation or extinguishment of liability as loan was to be repaid by third party and, therefore, same could not be brought to tax in hands of assessee. [Cable Corporation of India Ltd. v Dy. CIT [2019] 106 taxmann.com 194 (Mumbai – Trib.)]

2. Location of land from local limits of Chennai Municipal Corporation was relevant to decide as to whether said land was an agricultural land within meaning of section 2(14)(iii) and distance of land from Chennai Metropolitan area was not relevant in this context. [Naiyer Sultan v ITO [2019] 106 taxmann.com 191 (Kolkata – Trib.)]

3. Where AO held that profit earned by assessee from sale of shares was taxable as business income, in view of fact that assessee had entrusted task of trading in shares to professionally managed Portfolio Management Services (PMS) to seize favourable market movements and, moreover, large number of scrips were traded and period of holding at times was as short as few days, impugned order did not require any interference. [Tash Investment (P.) Ltd. v Asst. CIT [2019] 106 taxmann.com 190 (Ahmedabad – Trib.)]

4. Where assessee questioned correctness of DVO’s report, notice was to be issued to DVO to submit his stand in relevant matter to adjudicate correctness of DVO’s report. [Lovy Ranka v Dy. CIT [2019] 106 taxmann.com 193 (Ahmedabad – Trib.)]

5. Where assessee pharma company incurred expenditure towards business promotion by distribution of ball pens and medical gifts, etc., with logo of assessee company to doctors and hospitals, so as to make persons connected with business of assessee aware of its products, same was allowable as business expenditure and Explanation 1 to section 37(1) could not be applied. [Aishika Pharma (P.) Ltd. v ITO [2019] 106 taxmann.com 192 (Delhi – Trib.)]

6. AO can’t reject valuation report prepared by prescribed valuer following DCF method. If IT Act provides assessee to get valuation done from a prescribed expert as per prescribed method, then same cannot be rejected because neither Assessing Officer nor assessee has been recognized as expert under law. [Cinestaan Entertainment (P.) Ltd. v ITO [2019] 106 taxmann.com 300 (Delhi – Trib.)]

7. Where P&H High Court’s order holding that land on which SEZ project was constructed was acquired by assessee fraudulently was stayed by Supreme Court, deduction under section 80-IAB could not be denied when project had already been completed. [DLF Ltd. v Asst. CIT [2019] 106 taxmann.com 294 (Delhi – Trib.)]

8. Where AO made addition to assessee’s income under sec. 69A in respect of capital gain arising from sale of shares of ‘K’ Ltd. on basis of information received from Investigation Wing that said company was engaged in providing bogus entries of capital gain or sale of shares, since assessee had failed to discharge her burden of proof that long-term capital gain arising from sale of shares was genuine, impugned additions was to be confirmed. [Pooja Ajmani v ITO [2019] 106 taxmann.com 65 (Delhi – Trib.)]

9. Holding period of shares transfer by NDTV’s promoter from self to joint DEMAT A/c reckoned from date of transfer. [Radhika Roy v Dy. CIT [2019] 106 taxmann.com 210 (Delhi – Trib.)]

10. Purchase of semi-finished flat to be treated as purchase of property for construction for sec. 54 claim. [Asst. CIT v Akshay Sobti [2019] 106 taxmann.com 60 (Delhi – Trib.)]

11. Where assessee was engaged in development of housing project units which were neither units in SEZ nor assessee was developer of SEZ, its income would not be exempt from payment of MAT. [Gee City Builders (P.) Ltd. v Dy. CIT [2019] 106 taxmann.com 69 (Chandigarh – Trib.)]

12. Where assessee-company had shown value of goods in closing stock at nil, in view of facts that assessee was following similar method of valuation of closing stock year after year and same was accepted in earlier year by revenue and, further, considering nature of these items it was clear that these items day to day reduce in their value, Commissioner (Appeals) was justified in accepting said valuation of closing stock. [ITO v Wasan Exports (P.) Ltd. [2019] 106 taxmann.com 21 (Delhi – Trib.)]

13. Sec. 54EC exemption available on capital gains arising from sale of client relationships & goodwill. [J.C. Bhalla & Co. v Addl. CIT [2019] 106 taxmann.com 13 (Delhi – Trib.)]

14. Contribution to EPF deposited before due date of filing of return couldn’t be disallowed. [All Saints School v ITO [2019] 105 taxmann.com 149 (Delhi – Trib.)]

15. Onus of proving a benami transaction rests on shoulders of I.O. who is making charge and such burden has to be strictly discharged based on legal evidence. [PBPTA-AT v Manpreet Estates LLP, Mum. [2019] 105 taxmann.com 187 (PBPTA – AT)]

16. ITAT uphold applicability of AS-7 to contract of building Simulators for Ministry of Defence. [CAE India (P.) Ltd. v CIT [2019] 106 taxmann.com 4 (Bengaluru – Trib)]

17. Matter remanded back for condonation of delay as penalty orders were already challenged by filing a common appeal. [Vijay Kumar Sood v Dy. CIT [2019] 106 taxmann.com 3 (Chandigarh – Trib.)]

18. Where Assessing Officer made additions to income of assessee-company by invoking provisions of section 56(2)(viib) in respect of excess share premium received by it, since assessee was second level subsidiary of a company in which public was substantially interested, assessee’s case would not fall under section 56(2)(viib), thus, impugned addition made by Assessing Officer was unjustified. [Apollo Sugar Clinics Ltd. v Dy. CIT [2019] 105 taxmann.com 254 (Hyderabad – Trib.)]

19. Where transactions of purchase and sale of shares was made by assessee through registered stock exchange at prevailing market prices after duly suffering STT and assessee had furnished all primary evidences in form of trade files, contract rates, demat statements and bank statements to prove genuineness of said transactions, loss incurred on such transactions could not be disallowed treating same to be bogus. [Dy. CIT v PRB Securities (P.) Ltd. [2019] 105 taxmann.com 129 (Kolkata – Trib.)]

20. Where assessee received loan from two companies which were substantially involved in business of money lending, proviso (ii) to section 2(22)(e) would apply to assessee’s case and addition of deemed dividend made to assessee’s income was to be deleted. [Mohan Bhagwatprasad Agrawal v Dy. CIT [2019] 105 taxmann.com 256 (Ahmedabad – Trib.)]

 21. Where AO made addition to assessee’s income under section 68 in respect of share premium collected over and above premium worked out in Valuation Certificate submitted to RBI, in view of fact that as per Notification No. FEMA/203/2010-RB, dated 7-4-2010, share premium amount worked out in Valuation Certificate is minimum amount that can be collected by assessee and, hence, there is no bar on collecting higher amount as share premium, impugned addition was to be deleted. [Dy. CIT v Varsity Education Management (P.) Ltd. [2019] 105 taxmann.com 291 (Mumbai – Trib.)]

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TRANSFER PRICING CASE LAWS

1. Where TPO had accepted benchmarking done by assessee under TNMM and no variation/adjustment was made by him to arm’s length price, imposition of penalty under section 271G would be unsustainable. [Asst. CIT v Ankit Gems (P.) Ltd. [2019] 106 taxmann.com 243 (Mumbai – Trib.)]

2. Brand ambassadorship services by Shilpa Shetty to Jaipur IPL Team is not an international transaction. Where assessee acted as brand ambassador for Jaipur IPL Team and she involved herself in Cricket Matches, photo shoots, press interviews, personal appearances etc. but no receipts were reflected by her during assessment year on account of rendering of these services, section 92B(2) cannot be applied to hold that transaction between assessee and JICPL was an ‘International transaction’ as pre-requisite of a prior agreement between a non-AE with the AE of assessee is not fulfilled. [Shilpa Shetty v Asst. CIT [2019] 106 taxmann.com 304 (Mumbai – Trib.)]

3. Where in respect of consultancy, project monitoring and supervisory services rendered by assessee to its AE, TPO made addition to ALP by rejecting segmental results shown by assessee, in view of fact that TPO failed to point out difference between functions performed, assets deployed and risk undertaken by assessee in its transactions with AE and non-AE customers, segmental results had to be accepted and, consequently, impugned addition was to be deleted. [Asst. CIT v BCEOM (India) (P.) Ltd. [2019] 106 taxmann.com 147 (Delhi – Trib.)]

4. Where assessee filed Accountant’s Report in terms of section 92E in paper mode during assessment proceedings but failed to upload/file same electronically due to ignorance or oversight i.e., bona fide mistake, penalty under section 271BA was to be quashed. [Shree Ram Dass Rice & General Mills v Dy. CIT [2019] 105 taxmann.com 290 (Chandigarh – Trib.)]

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INTERNATIONAL TAXATION CASE LAWS

In case of Foreign Companies, Assessing Officer instead of passing final order under section 143 (3), passes Draft Assessment Orders to enable assessee to make an objection before Dispute Resolution Panel, which consists of experts in this field. Dispute Resolution Panel is empowered by Act to consider objections, and pass suitable orders, viz., may confirm, reduce or enhance variations proposed in draft order. Assessing Officer is bound to pass final Assessment Orders in tune with order of Dispute Resolution Panel. Against final order, First Appeal lies before Commissioner (Appeals) under section 246 and second appeal lies before Appellate Tribunal under section 253. Thereafter, an appeal lies to High Court under section 260A on substantial questions of law. [Cognizant (Mauritius) Ltd. v Dy. CIT [2019] 106 taxmann.com 389 (Madras)]

Where assessee a Russia based company, participated in water supply augmentation project and oil pipeline project etc. through its PE in India, since there was no transfer of any technical know-how and, moreover, entire payment received during year was attributable to PE in India, same was taxable as business profit in terms of India-Russia DTAA. [PJSC Stroytransgaz v Dy. DIT [2019] 106 taxmann.com 114 (Delhi – Trib.)]

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Disclaimer: Above said information are taken from publically available resources and believed to be accurate.

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