Taxmann's Daily Tax Digest: A Daily Section-wise digest of Judgments & Statutes on Income-Tax, GST, Company Laws, FEMA, Banking & Insurance Laws, Accounts & Audit, International Taxation, and Transfer Pricing.

1. [2020] [Vol.91] Part 20 Friday, July 24, 2020
INCOME TAX
STATUTES
S.O. 2411(E), DATED 21-07-2020
Cabinet Secretariat, Intelligence Bureau, NCB & NIA notified as Authority under Sec.
138
Editorial Note : Section 138(1) facilitates exchange of information about tax evaders by
the Income-tax Department with other tax authorities or enforcement authorities. The
CBDT has notified Cabinet Secretariat, Intelligence Bureau, Narcotics Control Bureau
and National Investigation Agency for the purpose of sharing of information.
Read More
CIRCULAR 15/2020, DATED 22-07-2020
CBDT specifies procedures for notification of Sovereign Wealth Fund for the purpose of
exemption u/s 10(23FE)
Editorial Note : To notify Sovereign Wealth Fund (SWF) for the purpose of section
10(23FE), the CBDT has specified that the SWF shall file application in the Form I.
Further, the SWF shall also be required to file return of income along with audit report. It
shall also be required to file a quarterly statement within one month from the end of the
quarter electronically in Form II in respect of investment made.
Read More
SECTION 9 OF THE INCOME-TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR
ARISE IN INDIA - PERMANENT ESTABLISHMENT
Project Office/Branch Office : Where assessee, a Korean company, was awarded a
project by ONGC for purpose of surveys, design, etc., in view of fact that assessee was
not carrying on its core business through its Project Office in India, said Project Office
would not constitute permanent establishment within meaning of article 5(1) of DTAA
between India and Korea - Director of Income-tax (IT) v. Samsung Heavy Industries
Co. Ltd. - [2020] 117 taxmann.com 870 (SC)
Read More
Interest - ECB loan : Interest income earned by a Mauritius based Foreign Institutional
Investor, on foreign currency loans and debt securities was exempt under Article 11(3)(c)

2. of Indo-Mauritius DTAA - Deputy Commissioner of Income-tax (International
Taxation) v. HSBC Bank (Mauritius) Ltd. - [2020] 117 taxmann.com 750 (Mumbai -
Trib.)
Read More
Royalties/fees for technical services - Reimbursement of expenses : Where assessee, a
Singapore based company, seconded its employee to an Indian concern for carrying out
business operations of its restaurant outlets in India efficiently, in view of fact that said
employee worked under direct supervision and control of Indian concern and, moreover,
his salary cost was reimbursed to assessee on cost to cost basis, amount so paid was
not liable to tax in India as fee for technical services - Deputy Director of Income-
tax v.Yum! Restaurants (Asia) (P.) Ltd. - [2020] 117 taxmann.com 759 (Delhi - Trib.)
Read More
Prior PE, Place of Business : Where assessee, a Singapore based company, was
engaged in business of promotion, development, marketing and maintenance of
Computerized Reservation System (CRS), had its wholly owned subsidiary in India which
was exclusively performing marketing and distribution of CRS and was also securing
business for assessee by entering into subscription agreement with various travel agents,
it could be regarded as assessee's fixed PE in India - Sabre Asia Pacific (P.)
Ltd. v. Deputy Commissioner of Income Tax (International Taxation) - [2020] 117
taxmann.com 756 (Mumbai - Trib.)
Read More
SECTION 28(II) OF THE INCOME-TAX ACT, 1961 - BUSINESS INCOME -
COMPENSATION
Non-competition fee : Amount received by assessee as non-competition fee on executing
deed of covenant was not taxable under section 28(ii); it was exempt as capital
receipt - Shiv Raj Gupta v. Commissioner of Income-tax - [2020] 117 taxmann.com
871 (SC)
Read More
SECTION 241 OF THE INCOME-TAX ACT, 1961 - REFUND - POWER TO WITHHOLD,
IN CERTAIN CASES
SLP dismissed against High Court ruling that section 241A granting power to Assessing
Officer to withhold refund applies for assessment years after 1-4-2017 and not for earlier
assessment years - Principal Commissioner of Income-tax v. Vodafone Idea Ltd. -
[2020] 117 taxmann.com 879 (SC)
Read More
SECTION 245 OF THE INCOME-TAX ACT, 1961 - REFUNDS - SETTING OFF AGAINST
TAX DUE
Future demand : SLP dismissed against High Court ruling that admitted refund amount
could not have been retained by revenue authorities on ground that department may have
a future demand against assessee arising out of pending assessment orders -Principal

3. Commissioner of Income-tax v. Vodafone Idea Ltd. - [2020] 117 taxmann.com 879
(SC)
Read More
SECTION 260A OF THE INCOME-TAX ACT, 1961 - HIGH COURT - APPEAL TO
Procedure of : If High Court wishes to hear appeal on any other substantial question of
law not formulated by it, it may, for reasons to be recorded, formulate and hear such
questions if it is satisfied that case involves such question - Shiv Raj
Gupta v.Commissioner of Income-tax - [2020] 117 taxmann.com 871 (SC)
Read More
GOODS AND SERVICES TAX
CLASSIFICATION OF GOODS
Flax fabric : Where appellant is engaged in manufacturing 'fusible interlining cloth', in view
of fact that it is not a case where cloth is partially coasted withe plastics and that dotted
design results from treatment leading to such coasting, exclusion clause (4) of Chapter
note 2(a) of Chapter 59, is not applicable and, thus, subject product merits classification
under Heading 5903 - Sadguru Seva Paridhan (P.) Ltd., In re - [2020] 117
taxmann.com 777 (AAAR-WEST BENGAL)
Read More
Tanks and tanks parts : 'Tanks' are classifiable under CTH 87100000 while tank parts
which satisfy essential conditions i.e. they must be identifiable as being suitable for use
solely or principally with tanks and must not be excluded by provisions of Notes to
Section XVII and must not be more specifically included elsewhere in Nomenclature, are
only to be classified as 'Parts' under CTH 87100000 - Heavy Vehicles Factory, In re -
[2020] 117 taxmann.com 671 (AAR - TAMILNADU)
Read More
COMPANY AND SEBI LAWS
STATUTES
CIRCULAR NO. SEBI/HO/IMD/DF3/CIR/P/2020/130 JULY 22, 2020
Mutual funds to undertake 10% corp bond trade through RFQ platform: SEBI
Editorial Note : In order to enhance the transparency and disclosure pertaining to debt
schemes and investments by mutual funds in Corporate Bonds/Commercial Papers, SEBI
based on the recommendation of Mutual Fund Advisory Committee has decided that
Mutual Funds shall undertake at least 10% of their total secondary market trades by value
(excluding Inter Scheme Transfer trades) in the Corporate Bonds by placing/seeking

4. quotes through one-to-many mode on the Request for Quote (RFQ) platform of stock
exchanges.
Read More
SECTION 74 OF THE COMPANIES ACT, 2013 - DEPOSITS - REPAYMENT OF,
ACCEPTED BEFORE COMMENCEMENT OF THIS ACT
Petition filed under section 74(3), seeking refund of amount deposited with respondent
company for purchase of flat could not be entertained where said issue was already
pending disposal in criminal proceedings as well as proceedings under Consumer
Protection Act - Arpit Agarwal v. Skytech Constructions (P.) Ltd. - [2020] 117
taxmann.com 667 (NCLT - New Delhi)
Read More
COMPETITION LAW
SECTION 3 OF THE COMPETITION ACT, 2002 - PROHIBITION OF AGREEMENT
Anti-competitive agreements : Where OPs had indulged in cartelisation in Composite
Brake Blocks market in India by means of directly or indirectly determining prices,
allocating markets, co-ordinating bid response and manipulating bidding process, which
had an appreciable adverse effect on competition within India, they were guilty of
contravention of provisions of section 3 - Chief Materials Manager v. Hindustan
Composites Limited. - [2020] 117 taxmann.com 773 (CCI)
Read More
FEMA BANKING AND INSURANCE LAWS
STATUTES
CIRCULAR NO. 194/2020, DATED 22-07-2020
IRDAI issues consolidated guidelines on product filing in Health Insurance Business
Editorial Note : The IRDAI has issued consolidated guidelines on product filing in Health
Insurance Business. These consolidated guidelines are applicable to all insurers and
TPAs wherever applicable unless otherwise specified.
Read More
INSOLVENCY AND BANKRUPTCY CODE

5. SECTION 5(7) OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE
INSOLVENCY RESOLUTION PROCESS
Financial creditor : An application filed under section 7 cannot be opposed by corporate
debtor by taking a plea that financial creditor has already taken possession of an
immovable property mortgaged sale proceeds of which would be sufficient to liquidate
debt - Jammu & Kashmir Bank Ltd. v. Vinayak Rathi Steels Rolling Mills (P.) Ltd. -
[2020] 117 taxmann.com 725 (NCLT - New Delhi)
Read More
SECTION 10A OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE
INSOLVENCY RESOLUTION PROCESS
Suspension of : Section 10A relates back to date of 25-03-2020 in reckoning date of
default even though Ordinance got promulgated only on 05-06-2020 and published in
Gazette of India and, thus, in case default had occurred on or after 25-03-2020, Tribunal
should desist from entertaining such an application, even though filed between dates of
25-03-2020 and 05-06-2020 that too both dates being within six months period initially
specified under section 10A and in view of interdiction imposed by Code itself in relation
to filing an application under sections 7, 9 and 10 of Code - Siemens Gamesa
Renewable Power (P.) Ltd. v. Ramesh Kymal - [2020] 117 taxmann.com 781 (NCLT-
Chennai )
Read More
OPINIONS
Whether dismissal of SLP by Hon’ble Apex Court creates a binding
precedence?- D.C. Agrawal, Advocate, Y.K. Gaiha, Advocate - [2020]
117 taxmann.com 858 (Article)
Read More
Are charitable institutions barred from expending in foreign currency? - S.
Sriram, Joint Partner, Direct Tax Team, Lakshmikumaran &
Sridharan, Neha Sharma, Senior Associate, Direct Tax Team,
Lakshmikumaran & Sridharan - [2020] 117 taxmann.com 856 (Article)
Read More

6. Can a female member become the Karta of HUF ? - S. Krishnan, FCA, R.
Raghunathan, FCA, ACMA, LL.B., DISA - [2020] 117 taxmann.com 852
(Article)
Read More
Cost Contribution Arrangements: Evaluation of BEPS Amendment -
Divyasha Mathur, Advocate, LLM - [2020] 117 taxmann.com 857
(Article)
Read More
Refund of ITC on Account of Inverted Duty Structure - Not For Traders? -
Anshul Jain, Advocate, High Court of Gujarat - [2020] 117
taxmann.com 854 (Article)
Read More
Inflated Electricity Bills & The Deflated Power Sector: A Tough Road In
Covid-19 - A.B. Kadam, Adv., S.S. Nargolkar, Associates, Nargolkar &
Associates, Mumbai - [2020] 117 taxmann.com 859 (Article)
Read More
Accounting for Changes to Lease Contracts - Santosh Maller, CA - [2020]
117 taxmann.com 860 (Article)
Read More