The Week That Was - Episode 34 (April 15, 2016)

DRAFT RULES

Draft rules for granting relief or deduction of Income-tax under section 90/ 90A/ 91 of the Income-tax Act

CASE LAWS

2016-TII-06-ARA-IT

CORPRO SYSTEMS LTD : AUTHORITY FOR ADVANCE RULING (Dated: April 4, 2016)

Income tax - Sections 9(1)(vii), 44BB, 44D & 44DA.

Keywords - Coring Services - consortium - FTS - sub-contracting - second-level contract - extraction of mineral oil - Plant.

Whether provisions of Section 44BB are agreement centric and not activity centric - NO: AAR

Whether the activities of coring services with respect to removal of sample formation materials in the process of extraction of mineral oils are covered by the ratio of the Apex Court ruling in the case of ONGC Vs CIT - YES: AAR

Ruled in favour of Applicant

2016-TII-207-ITAT-MUM-TP

SANDSTONE CAPITAL ADVISORS PVT LTD Vs DCIT : MUMBAI ITAT (Dated: March 31, 2016)

Income Tax - Sections 14A, 92C(3) & 143(3).

Keywords: TP adjustment - AE - TPO - related party transactions - functionally comparable - exempt income - investment - advisory services - multiple segments - research analysis.

Whether in case the contents of Directors report for the relevant year clearly establish that the company's activities are qualitatively distinct and much more diversified than what is being undertaken by the assessee for its AE, such company can still be considered as a valid comparable - NO: ITAT

Whether even if an entity is declaring income from a solitary stream of advisory fee, but factually it was found engaged in diversified activities and financial data was not available for each segment, can the same be considered as a genuine comparable - NO: ITAT

Whether if for the purpose of applying TNMM, after the exclusion of a comparable from the list of comparables, the margin earned by the assessee comes well within the permissible range of arm's length price, any ALP adjustment can still be made - NO: ITAT

Assessee's appeal allowed