Tax updates june 19

TAX UPDATES – JUNE ‘19 ROUND UP
BY CA. REETIKA G AGARWAL
NEWS
DIRECT TAX
1. CBDT clarified that an assessee is entitled to
claim set-off of loss against income determined
under section 115BBE of the Act till the
assessment year 2016-17.
[Ref: Circular no 11/2019 [F.NO.225/45/2019-
ITA.II], Dated 19-6-2019]
2. CBDT issues revised guidelines for compounding
of offences under Direct Tax Laws
[Ref:-Circular F. No. 285/08/2014-IT (INV.V)/
147, DATED 14-6-2019]
3. FM Nirmala Sitharaman raises serious issues
related to digital tax at G20 finance ministers
meeting
[Ref:-https://www.taxmann.com]
4. G20 Finance Ministers agree to introduce
‘Digital Tax Rules’ for tech giants by 2020.
5. CBDT issues direction to AO for making
‘Assessment of Firms’.
6. 702 start-ups have been exempted from Angel
Tax provisions till June 21, 2019: Ministry of
Commerce & Industry
7. Govt. reduces interest rates for small savings
schemes by 0.10%.
OECD
1. OECD releases international exchange
framework for CRS-related mandatory
disclosure rules and updates its XML schemas
for the exchange of CRS, CbC and tax ruling
information
[Ref:-https://www.oecd.org/tax/oecd-
releases-international-exchange-framework-
for-crs-related-mandatory-disclosure-rules-
updates-xml-schemas-for-exchange-of-crs-cbc-
and-tax-ruling-information.htm]
2. India deposits its instrument of ratification for
the Multilateral BEPS Convention
[Ref:-http://www.oecd.org/tax/treaties/beps-
mli-signatories-and-parties.pdf]
3. Morocco signs landmark agreement to
strengthen its tax treaties.
[Ref:https://www.oecd.org/tax/beps/morocco
-signs-landmark-agreement-to-strengthen-its-
tax-treaties.htm
4. OECD expands functionality of MLI Matching
Database to include information on entry into
effect.
[Ref:-http://www.oecd.org/tax/treaties/mli-
matching-database.htm]
5. Russian Federation deposits its instrument of
ratification for the Multilateral BEPS
Convention.
[Ref:-http://www.oecd.org/tax/treaties/beps-
mli-signatories-and-parties.pdf]
6. OECD expands transfer pricing country profiles
to cover 55 countries.
[Ref:-https://www.oecd.org/tax/transfer-
pricing/oecd-expands-transfer-pricing-country-
profiles-to-cover-55-countries.htm]
7. OECD launches new handbook to strengthen
tax administrations' capacity to support the
fight against money laundering and terrorist
financing.
[Ref:-https://www.oecd.org/tax/oecd-
launches-new-handbook-to-strengthen-tax-
administrations-capacity-to-support-the-fight-
against-money-laundering-and-terrorist-
financing.htm
8. Serbia joins international efforts against tax
evasion and avoidance.
[Ref:https://www.oecd.org/tax/exchange-of-
tax-information/serbia-joins-international-
efforts-against-tax-evasion-and-
avoidance.htm]

DOMESTIC TAX CASE LAWS
SUPREME COURT
1. Where High Court upheld Tribunal's order
holding that advertisement expenses incurred
by assessee being revenue in nature were
eligible for deduction under section 37(1), SLP
filed against decision of High Court was to be
dismissed. [Pr. CIT v Matrix Cellular
International Service (P.) Ltd [2019] 106
taxmann.com 126 (SC)]
2. SLP dismissed against High Court ruling that
section 226(3)(x) does not confer arbitrary
power on Income-tax department to recover
amount of tax liability of mining department
from innocent assessee who was awarded
tender for settlement of sand ghats by Mining
department. [Pr. CCIT v Sainik Food (P.) Ltd.
[2019] 106 taxmann.com 112 (SC)]
allowing assessee's claim for deduction under
section 80G by holding that for last three years
details had been provided to show that
charitable activities were being carried on and,
moreover, registration under section 12A
continued in favour of assessee, SLP filed
against decision of High Court was to be
dismissed. [CIT v Babbar Charitable Trust
[2019] 106 taxmann.com 160 (SC)]
4. SLP granted against High Court ruling that
Commissioner is not authorized under section
12AA(3) to cancel registration of charitable
trust retrospectively. [Asst. CIT v Agra
Development Authority [2019] 106
5. SLP filed against High Court's order allowing
assessee's application for stay subject to
payment of 10 per cent of tax demand, was to
be dismissed. [Popular Traders v Asst. CIT
[2019] 106 taxmann.com 89 (SC)]
6. Where High Court set aside Tribunal's order
deleting penalty imposed under section 271C by
taking a view that there were regular delays on
part of assessee in depositing tax deducted at
source with Central Government for which no
reasonable explanation was offered, SLP filed
against said decision was to be granted.
[Eurotech Maritime Academy (P.) Ltd. v CIT
[2019] 106 taxmann.com 87 (SC)]
7. SLP dismissed against High Court ruling that
where High Court had already set aside
reassessment proceedings for relevant
assessment year on one issue, there was no
warrant for issue of further notice under section
148 on another ground. [Dy. CIT v Rallis India
Ltd. [2019] 106 taxmann.com 54 (SC)]
8. Where Commissioner passed a revisional order
making addition to assessee's income under
section 69A in respect of on-money receipts,
however, said order was set aside by Tribunal
holding that AO had made detailed enquiries in
respect of on-money receipts and said view was
also confirmed by High Court, SLP filed against
decision of High Court was to be dismissed. [Pr.
CIT v Shree Gayatri Associates [2019] 106
allowing assessee's claim for exemption under
section 10AA on ground that only a part of
capital was received from a partner's
proprietorship concern and huge amount of
fresh capital had also been introduced and,
thus, it was not a case of reconstruction of
business, SLP filed against said order was to be
dismissed. [Pr. CIT v Green Fire Exports [2019]
106 taxmann.com 33 (SC)]
10. LP dismissed on ground of delay against High
Court ruling that where assessee entered into
an agreement for road development project
with Gujarat State Road Development
Corporation (GSRDC), in view of fact that GSRDC
was a Government agency as defined under
section 2(e) of Gujarat Infrastructure
Development Act, 1999 and, moreover, it was
totally controlled by State Government, claim

for deduction under section 80-IA could not be
rejected on ground that assessee failed to fulfil
conditions of clause (b) of sec. 80-IA (4). [CIT v
Ranjit Projects (P.) Ltd. [2019] 105
11. SC granted SLP against HC's ruling upholding
validity of provisions of sec. 80-IC & 115JB.
[S.B.L. (P.) Ltd. v CIT [2019] 105 taxmann.com
316 (SC)]
holding that activities of assessee were covered
by section 2(15) and, thus, assessee's claim for
accumulation of income under section 11(2)
was to be allowed, SLP filed against said order
was to be granted. [CIT v Ahmedabad Urban
Development Authority [2019] 105
13. Where High Court held that question raised by
revenue to effect that as to whether Tribunal's
order was to be treated as void-ab-initio in light
of third proviso to section 254(2A) which
provided that stay of demand would stand
vacated after expiry of a period of 365 days,
even if delay in disposal of appeal was not
attributable to assessee, was not a substantial
question of law, SLP filed against order of High
Court was to be dismissed. [Pr. CIT v BMW
India (P.) Ltd. [2019] 105 taxmann.com 136
(SC)]
deciding issue of levy of interest under section
234B in assessee's favour merely on basis of its
earlier order passed in another case, SLP filed
against said decision of High Court was to be
granted. [CIT v Shanghai Electric Group Co. Ltd.
[2019] 105 taxmann.com 312 (SC)]
deleting addition as well as penalty on ground
that excess stock existed only on account of
wrong entries in assessee's books of account
and not due to purchases made outside books
of account, SLP filed against decision of High
Court was to be dismissed. [Pr. CIT v Deccan
Mining Syndicate (P.) Ltd. [2019] 105
16. Where High Court disposed of assessee's
petition by directing him to avail alternative
remedy of appeal, SLP filed against said order
was to be dismissed. [Mahesh Kumar Agarwal v
Pr. CIT [2019] 105 taxmann.com 273 (SC)]
holding that AO could not straightaway reject
expenditure offered for disallowance under
section 14A and apply rule 8D without assigning
any reasons, SLP filed against said decision was
to be dismissed. [Pr. CIT v Moonstar Securities
Trading and Finance Co. (P.) Ltd. [2019] 105
*********
HIGH COURT
1. HC upholds tax demand of Rs. 2,500 crores as
issue of notice before making demand u/s 115-
O not required. [Cognizant Technology
Solutions India (P.) Ltd. v Dy. CIT [2019] 106
taxmann.com 388 (Madras)]
2. Where tax effect by virtue of order passed by
Tribunal was below Rs. 50 lakhs in assessee's
case, in view of mandate issued by CBDT in
circular No. 3, dated 11-7-2018, appeal filed by
revenue before HC was to be dismissed on
ground of low tax effect. [Pr. CIT v Hotel Leela
venture Ltd. [2019] 106 taxmann.com 242
(Bombay)]
3. Where assessee filed an application under
section 245C(1) making full and true disclosure
of income and same was admitted to be
proceeded with by Settlement Commission
under section 245D(1), in such a case,
Settlement Commission could have either
rejected said application or it could have
directed Principal Commissioner or
Commissioner to enquire and submit report so
as to enable to Commission to take a decision,

however, Settlement Commission could not
relegate matter to Assessing Officer to dispose
of assessee's case on merits. [Samdariya
Builders (P.) Ltd. v IT SetCom [2019] 106
taxmann.com 189 (Madhya Pradesh)]
4. Where assessee oil exploration company had no
choice but to surrender oil blocks as
Government of India refused to extend contract
period for oil exploration, act of assessee to
hand over oil blocks before commencement of
commercial production would be treated as
'surrender' for claiming deduction of oil
exploration expenditure under section 42(1)(a).
[Pr. CIT v Hindustan Oil Exploration Company
Ltd. [2019] 106 taxmann.com 117 (Bombay)]
5. Where in course of appellate proceedings
against order holding assessee liable to deduct
tax under section 195, department issued
notices under sections 201(1) and 201(1A), in
view of fact that assessee had kept a sum of Rs.
10 Million US Dollars in escrow account which
would be by and large sufficient to meet with its
TDS requirement if ultimately so arose, notices
issued to assessee under sections 201 and
201(1A) would stand stayed during pendency of
proceedings. [Business Process Outsourcing,
LLC v AAR (IT) [2019] 106 taxmann.com 146
(Bombay)]
6. HC quashes reassessment initiated after 6 years
to disallow deduction of programme rights
claimed by ‘Asianet’. [Asianet Star
Communications (P.) Ltd. v Asst. CIT [2019] 106
7. Where computer system of Income-tax
Department could not rectify duplication of
entry in old TAN and new TAN resulting in TDS
mismatch, department could not withhold
refund payable to assessee. [Vodafone Idea
Ltd. v Dy. CIT [2019] 106 taxmann.com 22
(Bombay)]
8. Where Assessing Officer concluded re-
assessment before assessee could file
objections to reasons recorded, and since
assessee was not provided breathing time to
furnish preliminary objections, re-assessment
order was to be set aside. [Mrs. Kanchan
Agarwal v ITO [2019] 106 taxmann.com 23
(Karnataka)]
9. Where assessee made disclosure of undisclosed
income in statements recorded under section
132(4) during course of search and had also
specified manner in which such income was
derived but paid tax in respect of such income
belatedly, since there is no time frame
prescribed for payment of tax in Explanation
5(2) to section 271(1)(c), assessee was entitled
to immunity from penalty under section
271(1)(c). [Duraipandi & S. Thalavaipandian
AOP v Asst. CIT [2019] 106 taxmann.com 20
(Madras)]
10. Merely because housing complex was situated
on a piece of land which was occupied by Co-
operative Housing Society under a long term
lease, would make no difference while
considering assessee's claim for deduction
under section 54 in respect of capital gain
arising from sale of flat in said society. [Pr. CIT v
Rahul Uday Tuljapurkar [2019] 106
taxmann.com 66 (Bombay)]
11. Unpaid consideration on sale of flat to
shareholder to be treated as deemed dividend
u/s 2(22)(e). [Bhagavathy Velan v Dy. CIT
[2019] 106 taxmann.com 67 (Madras)]
12. Finance Act, 2015 amendments to sec. 153C
would apply to search initiated on or after June
1, 2015. [Anil Kumar Gopikishan Agrawal v
Asst. CIT [2019] 106 taxmann.com 137
(Gujarat)]
13. Where Assessing Officer rejected assessee's
claim for carry forward of loss on ground that
return was not filed within time prescribed
under section 139(1) and, thereupon Tribunal
directed assessee to seek condonation of delay
in filing return from CBDT, in view of fact that

assessee did not file application for
condonation of delay even before CBDT within
permissible time limit, impugned order passed
by CBDT rejecting assessee's application on
ground of limitation and latches, did not require
any interference. [Ganesh Sahakari Bank Ltd. v
GOI [2019] 106 taxmann.com 62 (Bombay)]
14. No disallowance u/s 14A if AO failed to prove
that interest free funds were utilised to earn
exempt income. [Pr. CIT v Ashok Apparels (P.)
15. Where main object of assessee golf club was to
provide golf facilities to its members for
promotion of this sport and there was no
element of activity of assessee club being in
nature of trade, commerce or business, then
interest earned from banks or financial
institutions on investment of surplus funds
arising from charitable activities was exempted
from tax. [CIT v Bombay Presidency Gold Club
16. Assessee corporation set up for formulating and
executing housing scheme for benefit and
welfare of employees of Police department,
Government of Arunachal Pradesh, was not
eligible for exemption under section 10(26B)
because all persons of Police Department could
not be considered as belonging to Scheduled
Castes, Schedule Tribes or other backward
classes. [Arunachal Police Housing And Welfare
Corporation Ltd. v CIT [2019] 106 taxmann.com
53 (Gauhati)]
making addition to assessee's income under
section 68 in respect of amount deposited in
bank account, in view of fact that said amount
represented sale consideration of goods in
support of which assessee had produced
statement of bank account, copies of bills
issued to purchasers as also books of account
showing entries of deposits made in bank,
impugned revisional order was to be set aside.
[Pr. CIT v Dilip Kumar Swami [2019] 106
taxmann.com 59 (Rajasthan)]
18. Where revenue challenged impugned order
passed by Settlement Commission under
section 245D(2C) on ground that same was
passed without passing an order under section
245D(3) requiring a further enquiry into certain
transactions of assessee, since department had
not set out any grounds and reasons why in
facts of case, such enquiry or investigation as
envisaged under section 245D(3) was
necessary, impugned order passed under
section 245D(2C) was justified. [Pr. CIT v
Income Tax Settlement Commission [2019] 106
taxmann.com 12 (Bombay)]
19. Where issue of refund order was not delayed
for any period attributable to assessee, Tribunal
was correct in allowing interest to assessee in
terms of section 244A(1)(a) Just because the
assessee had raised a belated claim during the
course of the assessment proceedings which
resulted into delay in granting of refund, it
couldn’t be said that refund have been delayed
for the reasons attributable to the assessee and
assessee wasn’t entitled to interest for the
entire period from the first date of assessment
year till the order giving effect to the appellate
order was passed. [CIT v Melstar Information
Technologies Ltd. [2019] 106 taxmann.com 142
(Bombay)]
20. Merely because there was an agreement
between Assessee Company and related party
in which one of directors had substantial
interest, same could not be allowed in absence
of genuineness of transaction. [Patterson & Co.
(P.) Ltd. v Dy. CIT [2019] 105 taxmann.com 150
(Madras)]
21. Where Assessing Officer did not apply mind to
correctness of books of account produced
before her except to note that books of account
were produced and test checked, impugned
revisional order passed under section 263 was
to be upheld. [Pr. CIT v Venus Woollen Mills,
Ludhiana [2019] 105 taxmann.com 287 (Punjab

& Haryana)]
giving certain directions to Assessing Officer to
modify assessment in a particular way,
impugned notice issued after expiry of eight
years to carry out such directions was barred by
limitation under section 153(3) on account of
unreasonable delay. [GE T & D India Ltd. v Dy.
CIT [2019] 105 taxmann.com 286 (Madras)]
23. Where property was mortgaged by assessee
after he had acquired property, amount paid by
assessee to discharge mortgage debt by sale of
said property could not be treated as cost of
acquisition so as to allow same as deduction
under section 48. [Tmt. D. Zeenath v ITO [2019]
105 taxmann.com 298 (Madras)]
24. Where assessee had taken a building on lease
and incurred expenditure towards interior
improvement and further construction of two
floors of said building, impugned expenditure
incurred by assessee had brought enduring
benefit; therefore, same was capital in nature
and would come within mischief of Explanation
1 to section 32(1). [CIT v Viswams [2019] 105
25. Where assessee could not explain allotment of
shares in excess of authroised capital where
there was no SEBI approval for same and
assessee could also not justify premium of 457
per cent over face value of shares and also
genuineness of transaction and
creditworthiness of individual providing money,
reassessment notice was justified. [Max
Ventures Investments Holdings (P.) Ltd. v ITO
[2019] 105 taxmann.com 124 (Delhi)]
26. Search warrant is invalid if provisions of section
132 not attracted; HC quashes search
proceedings. [Laljibhai Kanjibhai Mandalia v Pr.
DIT [2019] 105 taxmann.com 260 (Gujarat)]
27. Where by non-speaking order Revenue rejected
petitioner's application for stay on demand
which was contrary to orders of appellate
authorities in preceding years and, further,
without issuing any reasonable notice,
withdrew certain amount from provisionally
attached bank account of assessee towards
adjustment against demand for other years,
action of Revenue was high handed and
manifestly unfair towards petitioner.
[Milestone Real Estate Fund v Asst. CIT [2019]
105 taxmann.com 292 (Bombay)]
28. Where mortgage was created by assessee much
before a demand was made under rule 2 of
second schedule and even before an order of
assessment was passed, said mortgage did not
become automatically void under section
281(1). [ICICI Bank Ltd. v TRO [2019] 105
taxmann.com 257 (Andhra Pradesh and
Telangana)]
29. On retirement, allotment to retiring partner of
his share in assets of partnership firm after
deduction of liabilities is not transfer within
meaning of section 2(47) so as to assess capital
gains under section 45(4). [National Company v
Asst. CIT [2019] 105 taxmann.com 255
(Madras)]
*******
INCOME TAX APPELLATE TRIBUNAL
1. Where assessee assigned its loan obligation to a
third party by making a payment in terms of
present value of future liability, surplus
resulting from assignment of loan was not
cessation or extinguishment of liability as loan
was to be repaid by third party and, therefore,
same could not be brought to tax in hands of
assessee. [Cable Corporation of India Ltd. v Dy.
CIT [2019] 106 taxmann.com 194 (Mumbai -
Trib.)]
2. Location of land from local limits of Chennai
Municipal Corporation was relevant to decide
as to whether said land was an agricultural land
within meaning of section 2(14)(iii) and distance
of land from Chennai Metropolitan area was

not relevant in this context. [Naiyer Sultan v
ITO [2019] 106 taxmann.com 191 (Kolkata -
Trib.)]
3. Where AO held that profit earned by assessee
from sale of shares was taxable as business
income, in view of fact that assessee had
entrusted task of trading in shares to
professionally managed Portfolio Management
Services (PMS) to seize favourable market
movements and, moreover, large number of
scrips were traded and period of holding at
times was as short as few days, impugned order
did not require any interference. [Tash
Investment (P.) Ltd. v Asst. CIT [2019] 106
taxmann.com 190 (Ahmedabad - Trib.)]
4. Where assessee questioned correctness of
DVO's report, notice was to be issued to DVO to
submit his stand in relevant matter to
adjudicate correctness of DVO's report. [Lovy
Ranka v Dy. CIT [2019] 106 taxmann.com 193
(Ahmedabad - Trib.)]
5. Where assessee pharma company incurred
expenditure towards business promotion by
distribution of ball pens and medical gifts, etc.,
with logo of assessee company to doctors and
hospitals, so as to make persons connected
with business of assessee aware of its products,
same was allowable as business expenditure
and Explanation 1 to section 37(1) could not be
applied. [Aishika Pharma (P.) Ltd. v ITO [2019]
106 taxmann.com 192 (Delhi - Trib.)]
6. AO can’t reject valuation report prepared by
prescribed valuer following DCF method. If IT
Act provides assessee to get valuation done
from a prescribed expert as per prescribed
method, then same cannot be rejected because
neither Assessing Officer nor assessee has been
recognized as expert under law. [Cinestaan
Entertainment (P.) Ltd. v ITO [2019] 106
taxmann.com 300 (Delhi - Trib.)]
7. Where P&H High Court's order holding that land
on which SEZ project was constructed was
acquired by assessee fraudulently was stayed
by Supreme Court, deduction under section 80-
IAB could not be denied when project had
already been completed. [DLF Ltd. v Asst. CIT
[2019] 106 taxmann.com 294 (Delhi - Trib.)]
8. Where AO made addition to assessee's income
under sec. 69A in respect of capital gain arising
from sale of shares of 'K' Ltd. on basis of
information received from Investigation Wing
that said company was engaged in providing
bogus entries of capital gain or sale of shares,
since assessee had failed to discharge her
burden of proof that long-term capital gain
arising from sale of shares was genuine,
impugned additions was to be confirmed.
[Pooja Ajmani v ITO [2019] 106 taxmann.com
65 (Delhi - Trib.)]
9. Holding period of shares transfer by NDTV’s
promoter from self to joint DEMAT A/c
reckoned from date of transfer. [Radhika Roy v
Dy. CIT [2019] 106 taxmann.com 210 (Delhi -
Trib.)]
10. Purchase of semi-finished flat to be treated as
purchase of property for construction for sec.
54 claim. [Asst. CIT v Akshay Sobti [2019] 106
11. Where assessee was engaged in development
of housing project units which were neither
units in SEZ nor assessee was developer of SEZ,
its income would not be exempt from payment
of MAT. [Gee City Builders (P.) Ltd. v Dy. CIT
[2019] 106 taxmann.com 69 (Chandigarh -
Trib.)]
12. Where assessee-company had shown value of
goods in closing stock at nil, in view of facts that
assessee was following similar method of
valuation of closing stock year after year and
same was accepted in earlier year by revenue
and, further, considering nature of these items
it was clear that these items day to day reduce
in their value, Commissioner (Appeals) was
justified in accepting said valuation of closing

stock. [ITO v Wasan Exports (P.) Ltd. [2019] 106
13. Sec. 54EC exemption available on capital gains
arising from sale of client relationships &
goodwill. [J.C. Bhalla & Co. v Addl. CIT [2019]
106 taxmann.com 13 (Delhi - Trib.)]
14. Contribution to EPF deposited before due date
of filing of return couldn't be disallowed. [All
Saints School v ITO [2019] 105 taxmann.com
149 (Delhi - Trib.)]
15. Onus of proving a benami transaction rests on
shoulders of I.O. who is making charge and such
burden has to be strictly discharged based on
legal evidence. [PBPTA-AT v Manpreet Estates
LLP, Mum. [2019] 105 taxmann.com 187
(PBPTA – AT)]
16. ITAT uphold applicability of AS-7 to contract of
building Simulators for Ministry of Defence.
[CAE India (P.) Ltd. v CIT [2019] 106
taxmann.com 4 (Bengaluru – Trib)]
17. Matter remanded back for condonation of delay
as penalty orders were already challenged by
filing a common appeal. [Vijay Kumar Sood v
Dy. CIT [2019] 106 taxmann.com 3 (Chandigarh
- Trib.)]
18. Where Assessing Officer made additions to
income of assessee-company by invoking
provisions of section 56(2)(viib) in respect of
excess share premium received by it, since
assessee was second level subsidiary of a
company in which public was substantially
interested, assessee's case would not fall under
section 56(2)(viib), thus, impugned addition
made by Assessing Officer was unjustified.
[Apollo Sugar Clinics Ltd. v Dy. CIT [2019] 105
taxmann.com 254 (Hyderabad - Trib.)]
19. Where transactions of purchase and sale of
shares was made by assessee through
registered stock exchange at prevailing market
prices after duly suffering STT and assessee had
furnished all primary evidences in form of trade
files, contract rates, demat statements and
bank statements to prove genuineness of said
transactions, loss incurred on such transactions
could not be disallowed treating same to be
bogus. [Dy. CIT v PRB Securities (P.) Ltd. [2019]
105 taxmann.com 129 (Kolkata - Trib.)]
20. Where assessee received loan from two
companies which were substantially involved in
business of money lending, proviso (ii) to
section 2(22)(e) would apply to assessee's case
and addition of deemed dividend made to
assessee's income was to be deleted. [Mohan
Bhagwatprasad Agrawal v Dy. CIT [2019] 105
taxmann.com 256 (Ahmedabad - Trib.)]
21. Where AO made addition to assessee's income
under section 68 in respect of share premium
collected over and above premium worked out
in Valuation Certificate submitted to RBI, in
view of fact that as per Notification No.
FEMA/203/2010-RB, dated 7-4-2010, share
premium amount worked out in Valuation
Certificate is minimum amount that can be
collected by assessee and, hence, there is no
bar on collecting higher amount as share
premium, impugned addition was to be deleted.
[Dy. CIT v Varsity Education Management (P.)
Ltd. [2019] 105 taxmann.com 291 (Mumbai -
Trib.)]
**********

TRANSFER PRICING CASE LAWS
1. Where TPO had accepted benchmarking done
by assessee under TNMM and no
variation/adjustment was made by him to arm's
length price, imposition of penalty under
section 271G would be unsustainable. [Asst. CIT
v Ankit Gems (P.) Ltd. [2019] 106 taxmann.com
243 (Mumbai - Trib.)]
2. Brand ambassadorship services by Shilpa Shetty
to Jaipur IPL Team is not an international
transaction. Where assessee acted as brand
ambassador for Jaipur IPL Team and she
involved herself in Cricket Matches, photo
shoots, press interviews, personal appearances
etc. but no receipts were reflected by her
during assessment year on account of rendering
of these services, section 92B(2) cannot be
applied to hold that transaction between
assessee and JICPL was an 'International
transaction' as pre-requisite of a prior
agreement between a non-AE with the AE of
assessee is not fulfilled. [Shilpa Shetty v Asst.
CIT [2019] 106 taxmann.com 304 (Mumbai -
Trib.)]
3. Where in respect of consultancy, project
monitoring and supervisory services rendered
by assessee to its AE, TPO made addition to ALP
by rejecting segmental results shown by
assessee, in view of fact that TPO failed to point
out difference between functions performed,
assets deployed and risk undertaken by
assessee in its transactions with AE and non-AE
customers, segmental results had to be
accepted and, consequently, impugned addition
was to be deleted. [Asst. CIT v BCEOM (India)
(P.) Ltd. [2019] 106 taxmann.com 147 (Delhi -
Trib.)]
4. Where assessee filed Accountant's Report in
terms of section 92E in paper mode during
assessment proceedings but failed to
upload/file same electronically due to ignorance
or oversight i.e., bona fide mistake, penalty
under section 271BA was to be quashed. [Shree
Ram Dass Rice & General Mills v Dy. CIT [2019]
105 taxmann.com 290 (Chandigarh - Trib.)]
*********
INTERNATIONAL TAXATION CASE LAWS
1. In case of Foreign Companies, Assessing Officer
instead of passing final order under section 143
(3), passes Draft Assessment Orders to enable
assessee to make an objection before Dispute
Resolution Panel, which consists of experts in
this field. Dispute Resolution Panel is
empowered by Act to consider objections, and
pass suitable orders, viz., may confirm, reduce
or enhance variations proposed in draft order.
Assessing Officer is bound to pass final
Assessment Orders in tune with order of
Dispute Resolution Panel. Against final order,
First Appeal lies before Commissioner (Appeals)
under section 246 and second appeal lies
before Appellate Tribunal under section 253.
Thereafter, an appeal lies to High Court under
section 260A on substantial questions of law.
[Cognizant (Mauritius) Ltd. v Dy. CIT [2019] 106
2. Where assessee a Russia based company,
participated in water supply augmentation
project and oil pipeline project etc. through its
PE in India, since there was no transfer of any
technical know-how and, moreover, entire
payment received during year was attributable
to PE in India, same was taxable as business
profit in terms of India-Russia DTAA. [PJSC
Stroytransgaz v Dy. DIT [2019] 106
********
Disclaimer: Above said information are taken
from publically available resources and believed
to be accurate.

Tax updates june 19

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