2016-TII-INSTANT-ALL-310
31 March 2016   

CASE LAWS

2016-TII-163-ITAT-BANG-TP

SKF TECHNOLOGIES INDIA PVT LTD Vs DCIT: BANGALORE ITAT (Dated: March 31, 2016)

Income tax - Sections 40(a)(ia), 92CA & 144C

Keywords - ALP - AE - carry forward loss - FTS - group IT services - intra group payments - make available clause - PBIT - reimbursement of expenditure - TNMM - techinal fee & TDS

Whether an assessee has to establish receipt of benefits on account of services rendered by its AEs, if such AEs are compensated on a level comparable to payments that would have been made if similar services were received from unrelated parties or in an uncontrolled transaction - YES: ITAT

Whether it is open for the TPO to consider that there was no benefit whatever received by the assessee from its AE, without verifying the documentation submitted by the assessee - NO: ITAT

Whether payments made by an assessee to its AE abroad in respect of technical services rendered by such AE, can be taxed by the Revenue Authorities in India, without verifying the satisfaction as regards the "make available" clause - NO: ITAT

Whether the bench marking of the international transactions u/s 92CA, is similar to allowance of disallowance of an expenditure u/s 37 of the I-T Act - NO: ITAT

Case remanded

2016-TII-164-ITAT-BANG-TP

NOVELL SOFTWARE DEVELOPMENT INDIA PVT LTD Vs DCIT: BANGALORE ITAT (Dated: March 31, 2016)

Income Tax - Sections 35(2AB), 92A & 133(6).

Keywords: arm length price - set of comparables - DRP - TPO - TNMM - Resale price method - RPT filter - support services - software development.

Whether an assessee can be allowed to challenge the companies selected as comparables before TPO, even if such assessee has itself included such companies in the list of comparbles - YES : ITAT

Whether in case after application of average RPT filter, a respectable number of companies are left for the purpose of comparison in order to determine ALP, such filter is to be considered as apt and can be rightly applied - YES: ITAT

Whether if the segments of a company are substantially different, in that case, in order to determine the segmental results comparison at entity level is without basis and would vitiate the comparability - YES: ITAT

Assessee's appeal partly allowed

TII Circular/Notification

Circular/Notification No : 58

FDI in India - Review of FDI policy -Insurance sector

Circular/Notification No : 366

Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Fifth Amendment) Regulations, 2016

 

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