CASE LAWS

2016-TII-68-ITAT-DEL-INTL

BHARTI AIRTEL LTD Vs ITO: DELHI ITAT (Dated: March 17, 2016)

Income tax - Sections 5(2), 9(1)(vi) & (vii), 195, 201(1) & (1A) & 206AA - Rule 46A.

Keywords - interconnection charges - fees for technical services, make available, royalty, human intervention & use of process.

Whether interconnection service provided by a telecom operator is a composite process that involves human intervention - NO: ITAT

Whether even if no human intervention is required for routing of international calls, interconnection charges paid to foreign telecom operators are to be construed as fees for technical services - NO: ITAT

Whether any TDS obligation arises on payments made with respect to IUC to FTO - NO: ITAT

Whether when the tax treaties have no FTS clause, then interconnection charges are to be treated as business income - YES: ITAT

Assessee's appeals allowed

CIT Vs GENERAL ATLANTIC PVT LTD: BOMBAY HIGH COURT (Dated: March 8, 2016)

Income tax - ALP - AE - equity advisory services - finding of comparable - investment advisor & TNMM.

Whether finding of the comparable to be adopted to determine the ALP as the basis of the activity conducted by the assesee is essentially a finding of fact - YES: HC

Whether where such finding of assessee has been accepted by the Tribunal in a reasonable and possible view and the jurisdictional High Court has confirmed the same under similar circumstances during previous years, no interference is warranted on the same - YES: HC

Revenue's appeal dismissed

2016-TII-67-ITAT-DEL-INTL

CARGILL FINANCIAL SERVICES ASIA PTE LTD Vs ADIT: DELHI ITAT (Dated: March 15, 2016)

Income Tax - Sections 2(28A), 5(2), 9(1)(v)(c), 234B, 271(1)(c) - India-Singapore DTAA - Article 11.

Keywords - interest - discounting charges - AE - administrative and support services - treasury - actual usage - cost plus mark up - modus operandi - discounting bills.

Whether the discounting charges, received by non resident assessee on maturity of promissory note on realization of proceeds from the buyer, even after considering the commercial expediency of the transaction entered into, can be considered as in the nature of interest - NO: ITAT

Whether the true nature of a transaction regarding amounts paid by the Indian entity to its foreign AE, can alter merely by clubbing the discounting charges under the head 'financial expenses' - NO: ITAT

Assessee's appeal allowed

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