The Week That Was - Episode 32 (April 1, 2016)
CASE LAWS
2016-TII-19-HC-KAR-TP
CIT Vs FOSROC CHEMICALS INDIA PVT LTD : KARNATAKA HIGH COURT (Dated: March 22, 2016)
Income tax - Keywords - ALP - AE - CUP - commensurate benefit - independent international transaction - MAM - reimbursement of expenses - re-scrutiny & technical service fees
Whether it is open to the TPO to claim re-scrutiny as regards the payments commensurate to the volume and quality of services rendered by an AE, in respect of a related concern, where the factum of nexus between rendering of services by the AE and its payment by assessee has already been established by the ITAT - NO: HC
Revenue's appeal dismissed
2016-TII-20-HC-MAD-TP
SUTHERLAND GLOBAL SERVICES PVT LTD Vs UoI : MADRAS HIGH COURT (Dated: March 31, 2016)
Income Tax - Sections 92B & 92CA.
Keywords - average margin on cost - interim stay - non availability of resources - principles of natural justice.
Whether the plea of non-availability of time and the plea of non-availability of resources to search database is not correct, when the TPO had passed the order, after a period of two full months, from the issue of the show cause notice - YES: HC
Whether it is against the principle of natural justice, when provision of an opportunity is actually turned into an empty formality by the Officer withholding necessary information or by the officer refusing to consider certain things on the specious plea that there was lack of time or resources - YES: HC
Assessee's petition allowed
2016-TII-170-ITAT-DEL-TP
ACIT Vs TRANSCENT MT SERVICES PVT LTD : DELHI ITAT (Dated: March 14, 2016)
Income tax - ALP - AE - abnormal profits - benefit of adjustment - standard deduction & selection of comparables.
Whether an entity consistently earning abnormal profits and showing irregularities in its financial statement, can be considered as a comparable for benchmarking international transactions - NO: ITAT
Revenue's appeal dismissed