Income Tax : Learn about income tax exemptions for universities, hospitals, and educational institutions under Section 10 of the Income Tax Act...
Income Tax : Learn about the amendments to Section 92CA concerning references to the Transfer Pricing Officer for determining arm's length pric...
Income Tax : New transfer pricing rules allow arm’s length price (ALP) determinations to apply for two consecutive years, reducing compliance...
Income Tax : Finance Bill 2025 allows multi-year Arm’s Length Price determination for similar transactions, reducing repetitive proceedings i...
Finance : The Finance Bill 2025 proposes multi-year ALP determination to reduce compliance burdens in transfer pricing. Learn about its fram...
Income Tax : CBDT sets transfer pricing tolerance range at 1% for wholesale trading and 3% for other transactions for AY 2024-25, providing cla...
Income Tax : From April 2025, TPOs can determine ALP for SDTs not initially referred or reported. This ensures accurate adjustments and complia...
Income Tax : What is the procedure to approve Form 3CEB? Form uploaded by CA shall be available under For your action tab in Taxpayer’s Workl...
Income Tax : ICAI Releases Exposure Draft Guidance Note On Report Under Section 92E Of Income-Tax Act, 1961 (Transfer Pricing) Based on the la...
Income Tax : Association for Corporate Advisers and Executives (ACAE) made a Request for Extension of Due Dates for filing Tax Audit and Transf...
Income Tax : Advocate Amardeep Soni & Advocate Harsha Soni Gemplus India Pvt. Ltd. Vs ACIT (ITAT Bangalore) A Case Study of ITAT BANGALORE...
Income Tax : Bangalore ITAT overturns AO's PE classification of QlikTech India, orders fresh review based on TPO order, addresses TDS and inter...
Income Tax : ITAT Bangalore sets aside AO's decision in Qlik Tech International AB vs DCIT, addressing PE classification, TDS credit, and tax r...
Income Tax : ITAT Delhi directs inclusion of Magma Advisory Services Ltd. in Honda R&D's comparable list, rejecting TPO's reasons and DR's func...
Income Tax : ITAT Bangalore deletes AO’s protective addition in LM Wind Power case, citing settled MAP proceedings on IT fees and commission ...
Income Tax : CBDT sets 1% tolerance for wholesale trading and 3% for other cases under Section 92C for FY 2024-25. No adverse effects from retr...
Income Tax : Stay informed on the latest Income Tax Rule changes with Notification No. 104/2023 by the Ministry of Finance. Learn about amendme...
Income Tax : Read how CBDT's Notification No. 58/2023 amends Income-tax Rules, extending Safe Harbour rules to AY 2023-24. Insights from Minist...
Income Tax : Notification No. 46/2023-Income-Tax Dated: 26th June, 2023 regarding deemed arm's length price for assessment year 2023-2024. Le...
Income Tax : In exercise of the powers conferred by the third proviso to sub-section (2) of section 92C of the Income-tax Act, 1961 (43 of 1961...
It is proposed to amend the section 92CA of the Act retrospectively to empower Transfer Pricing Officer (TPO) to determine Arm’s Length Price of an international transaction noticed by him in the course of proceedings before him, even if the said transaction was not referred to him by the Assessing Officer, provided that such international transaction was not reported by the taxpayer as per the requirement cast upon him under section 92E of the Act.
Explore ITAT Mumbai’s decision on transfer pricing adjustment & interest receivable in international transactions, with key details & legal analysis.
MTV Asia LDC Vs. DCIT ITAT Held that The taxpayer did not provide any documentary evidence to substantiate various expenses incurred as well as no separate books of accounts were maintained for Indian operations. Therefore, application of Rule 10 of the Income-tax Rules 1962 prescribing computation of income on reasonable basis in case of non-resident is justifiable. Copies of tax computations filed with Singapore tax authorities reflect substantial losses to the taxpayer in respect of Global Operations. Therefore, margin applied by the AO are high. The transponder charges and programme charges constitute 95.88% of the revenue.
No exhaustive and compact definition of the phrase ‘transfer pricing’ is possible nor has it been attempted in the legislations in the countries that have tried to find solutions to this menace. When transfers by way of sales exchange, etc. are made between two independent entities unconnected with each other as normal business deals, there can hardly be any scope of alleging any malpractice or hidden motives in price fixation.
Kodiak Networks (India) Pvt Ltd Vs. ACIT (ITAT Bangalore)- As far as the data to be used by the TPO while determining the ALP was concerned, it is observed that it is covered by the provisions of rule 10D sub-rule 4 of the Income-tax Rules. Section 92 C provides that the arm’s length price in relation to an international transaction shall be determined by any of the methods being the most appropriate method having regard to the nature of transaction or class of transaction or class of associated persons or functions performed by such persons or such other relevant factors for computing the ALP and also any other method as may be prescribed by the Board. S. 92D provides that (i) every person who has entered into an international transaction shall maintain and keep such information and documents in respect thereof;
Without adjudicating on the issue whether the Advertisement, Marketing and Sales Promotion expenditure incurred by the taxpayer can be characterised as an international transaction as per Section 92B of the Act, the Tribunal held that the assumption of jurisdiction by the TPO in working out ALP is not justified and directed the AO to delete the adjustment made by the TPO.
The core issue that we are really required to adjudicate in this appeal is whether or not, on the facts and circumstances of this case, the assessee can be said to have a permanent establishment (PE)1 in India, and, if it is held that the assessee indeed has a permanent establishment in India how much profits can be taxed as being attributable to such a permanent establishment.
Ranbaxy Laboratories Ltd vs. CIT (Delhi High Court) – Judgment of Special Bench in Aztec Software (supra) is not in conflict with Sony India (supra) once the validity of said instruction is upheld by this Court. The followup thereof is that the Assessing Officer was supposed to refer the matter to the TPO having regard to the fact that Specialized Cell was created by the Revenue Department to deal with the complicated and complex issues arising out of the transfer mechanism. The Tribunal was right in holding that even the instant case itself provides a good example for need to refer the matter to TPO in such cases. When circular is issued under Section 119 of the Act and its validity is upheld it is binding on the Assessing Officer. Not taking recourse thereto and passing the order amounted to making assessment without conducting proper inquiry and investigation as enjoyed by law which was also warranted in the facts of this case and, therefore, the Commissioner was right in holding that such assessment was erroneous and prejudicial to the interest of the Revenue in the light of law laid down by the Apex Court in Malabar Industrial Co. Ltd. (supra).
M/s Aithent Technologies Pvt Ltd. V/s. ITO (ITAT Delhi)- In its Transfer pricing study, the assessee adopted CUP method and justified the interest free loan on the basis that it had sufficient interest free funds. The TPO rejected the claim and computed notional interest at the rate of 14percent, based on certain domestic borrowings of the assessee.. On appeal, the Tribunal observed that the cost incurred by the assessee was not a relevant consideration under the CUP method and held that it was irrelevant whether the loans were advanced out of own funds or out of borrowed funds and whether the interest free loan were commercially expedient for the assessee or not.
DIT Vs. BBC Worldwise Ltd. (Delhi HC)- Bombay High Court in Set Satellite (Singapore) Pvt. Ltd. (supra) held that if correct ALP is applied and paid, nothing further rwould be left to be taxed in the hands of the foreign enterprise. In the said case, Morgan Stanley (supra) as well as Circular No.23 issued by the CBDT was taken into consideration. The Court was also pleased to record that the commission paid to the agent was 15% services performed by the assessee‘s agent in India was in line with the existing industry standards in India at the prevalent time.
