Tax updates august '20

TAX UPDATES – AUGUST ‘20
REETIKA G AGARWAL, FCA
Contents
NEWS ................................................................................................................................................5
DOMESTIC TAX CASE LAWS ................................................................................................................6
SUPREME COURT ...........................................................................................................................6
[Raj Pal Singh v CIT [2020] 118 taxmann.com 508 (SC)] ................................................................6
[Pr. CIT v Income Tax Settlement Commission [2020] 118 taxmann.com 197 (SC)] ........................6
[CIT v United India Insurance Co. [2020] 117 taxmann.com 849 (SC)] ...........................................6
[Asst. CIT v Swastic Safe Deposit and Investments Ltd. [2020] 118 taxmann.com 94 (SC)] .............6
[Paras Organics (P.) Ltd. v Addl. CIT [2020] 118 taxmann.com 93 (SC)]..........................................6
[Pr. CIT v Himanshu Chandulal Patel [2020] 118 taxmann.com 92 (SC)] ........................................6
HIGH COURT ..................................................................................................................................7
[Krishna Venkata Ramana Shetty v ITSC [2020] 118 taxmann.com 424 (Madras)] .........................7
[CIT v Smt. A. Jagadeeswari [2020] 118 taxmann.com 369 (Madras)]............................................7
[Pr. CIT v Jakharia Fabric (P.) Ltd [2020] 118 taxmann.com 406 (Bombay)] ...................................7
[Kasautii v CIT [2020] 118 taxmann.com 407 (Jharkhand)] ...........................................................7
[Pr. CIT v Electro Urban Co-operative Credit Society Ltd. [2020] 118 taxmann.com 310 (Calcutta)]7
[Kamaraj Educational Trust v CCIT [2020] 118 taxmann.com 273 (Madras)]..................................7
[Renault Nissan Technology & Business Centre India (P.) Ltd. v CIT [2020] 118 taxmann.com 279
(Madras)] ...................................................................................................................................7
[CIT v Tarachanthini Services (P.) Ltd. [2020] 118 taxmann.com 252 (Madras)].............................7
[Hansa Estates (P.) Ltd. v Asst. CIT [2020] 118 taxmann.com 244 (Madras)]..................................8
[FLSmidth (P.) Ltd. v Dy. CIT [2020] 118 taxmann.com 272 (Madras)] ...........................................8
[Pr. CIT v Adani Agro (P.) Ltd. [2020] 118 taxmann.com 307 (Gujarat)] .........................................8
[Pr. CIT v Lotte India Corporation Ltd. [2020] 118 taxmann.com 225 (Madras)].............................8
[CIT v Nalwa Investment Ltd. [2020] 118 taxmann.com 278 (Delhi)] .............................................8
[Pr. CIT v Khivraj Motors (P.) Ltd. [2020] 118 taxmann.com 224 (Madras)] ...................................8
[CIT v Vetrivel Minerals [2020] 118 taxmann.com 172 (Madras)]..................................................8
[Ravinder Kumar v ITO [2020] 118 taxmann.com 166 (Delhi)] ......................................................8
[CIT v Shardlow India Ltd. [2020] 118 taxmann.com 115 (Madras)] ..............................................8
[CIT v Naman Associates [2020] 118 taxmann.com 165 (Gujarat)] ................................................9
[CIT v Accel Limited [2020] 118 taxmann.com 103 (Madras)]........................................................9
Page 1

[Pr. CIT v S. Yogarathnam [2020] 118 taxmann.com 54 (Madras)] ................................................9
[CIT v Manojbhai Bhupatrai Vadodaria [2020] 118 taxmann.com 109 (Gujarat)]...........................9
[Capricorn Food Products India Ltd. v Asst CIT [2020] 118 taxmann.com 68 (Madras)] ..................9
[DALBIR SINGH v SATISH CHAND [2020] 118 taxmann.com 36 (Delhi)] .........................................9
[Cooner Institute of Health Care & Research Centre (P.) Ltd. v ITO [2020] 118 taxmann.com 69
(Delhi)].......................................................................................................................................9
[Pandian Hotels Ltd. v Dy. CIT [2020] 118 taxmann.com 76 (Madras)] ..........................................9
[CIT v Neyveli Lignite Corporation Ltd. [2020] 117 taxmann.com 847 (Madras)]............................9
[Indus Towers Ltd. v Asst. CIT [2020] 117 taxmann.com 966 (Delhi)] ............................................9
[CIT v City Union Bank Ltd. [2020] 118 taxmann.com 96 (Madras)]...............................................9
[Savita Kapila v Asst CIT [2020] 118 taxmann.com 46 (Delhi)].....................................................10
[Sri Venkatesha Bottles v Asst. CIT [2020] 118 taxmann.com 91 (Karnataka)] .............................10
[Telekom Malaysia Berhad v UOI [2020] 118 taxmann.com 87 (Karnataka)] ...............................10
[Monarch v ITO [2020] 118 taxmann.com 88 (Karnataka)] .........................................................10
[CIT v Smt. Umayal Annamalai [2020] 118 taxmann.com 80 (Madras)] .......................................10
INCOME TAX APPELLATE TRIBUNAL ..............................................................................................11
[Zaveri & Co. (P.) Ltd v Dy. CIT [2020] 118 taxmann.com 429 (Ahmedabad - ITAT)] .....................11
[Sayqul Islam v ITO [2020] 118 taxmann.com 347 (Gauhati - Trib.)]............................................11
[Shivsagar Builders (P.) Ltd. v Asst. CIT [2020] 118 taxmann.com 349 (Delhi - Trib.)] ...................11
[Quippo Telecom Infrastructure (P.) Ltd. v Asst. CIT [2020] 118 taxmann.com 345 (Delhi - Trib.)]11
[Triveni Engineering & Industries Ltd. v Addl CIT [2020] 118 taxmann.com 301 (Delhi - Trib.)].....11
[Futura Polyster Ltd. v ITO [2020] 118 taxmann.com 243 (Mumbai - Trib.)] ................................11
[Jaee Vishwas Joshi v Asst. CIT [2020] 118 taxmann.com 291 (Mumbai - Trib.)] .........................11
[Mantola Co-operative Thrift & Credit Society Ltd. v ITO [2020] 118 taxmann.com 276 (Delhi -
Trib.)].......................................................................................................................................11
[Keshavlal Devkaranbhai Patel v Asst CIT [2020] 118 taxmann.com 223 (Rajkot - Trib.)] .............11
[Ramesh Govindbhai Patel v ITO [2020] 118 taxmann.com 201 (Ahmedabad - Trib.)] .................12
[BBR Projects (P.) Ltd. v ITO [2020] 118 taxmann.com 133 (Hyderabad - Trib.)] ..........................12
[Medley Pharmaceuticals Ltd. v Pr. CIT [2020] 118 taxmann.com 44 (Mumbai - Trib.)]................12
[ITO v Smt. Rekha Shetty [2020] 118 taxmann.com 10 (Chennai - Trib.)].....................................12
[Dy. CIT v Abro Technologies (P.) Ltd. [2020] 118 taxmann.com 65 (Delhi - Trib.)].......................12
[Star India (P.) Ltd. v Asst. CIT [2020] 117 taxmann.com 988 (Mumbai - Trib.)] ...........................12
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[Genpact India (P.) Ltd. v Dy. CIT [2020] 118 taxmann.com 40 (Delhi - Trib.)]..............................12
[Bar Council of Delhi v CIT [2020] 117 taxmann.com 980 (Delhi - Trib.)]......................................12
[Mubarak Gafur Korabu v ITO [2020] 117 taxmann.com 828 (Pune - Trib.)] ................................12
[Chowdry Associates v Asst. CIT [2020] 117 taxmann.com 840 (Delhi - Trib.)].............................13
[Hi-tech Estates & Promoters (P.) Ltd. v Pr. CIT [2020] 117 taxmann.com 965 (Cuttack - Trib.)] ...13
[Yes Bank Ltd. v Dy. CIT [2020] 117 taxmann.com 974 (Mumbai - Trib.)].....................................13
[Supreme Build Cap (P.) Ltd. v Asst. CIT [2020] 117 taxmann.com 848 (Delhi - Trib.)]..................13
[Abdul Hamid v ITO [2020] 117 taxmann.com 986 (Gauhati - Trib.)] ...........................................13
[Banc Tec TPS India (P.) Ltd. v Asst. CIT [2020] 117 taxmann.com 979 (Mumbai - Trib.)]..............13
INTERNATIONAL TAXATION CASE LAWS........................................................................................14
[Addy v Commissioner of Taxation [2020] 118 taxmann.com 267 (FC-Australia)]........................14
[Royal Bank of Canada v Commissioners [2020] 118 taxmann.com 77 (UKFTT)] ..........................14
[Next Gen Films (P.) Ltd. v ITO [2020] 118 taxmann.com 314 (Mumbai - Trib.)]...........................14
[Damco International A/S v Dy. CIT [2020] 118 taxmann.com 37 (Mumbai - Trib.)].....................14
[Edenred (P). Ltd. v Dy. DIT [2020] 118 taxmann.com 2 (Mumbai - Trib.)]...................................14
TRANSFER PRICING CASE LAWS ....................................................................................................15
[Wipro GE Healthcare (P.) Ltd. v Dy. CIT [2020] 118 taxmann.com 302 (Karnataka)] ...................15
[Dy. CIT v Exxon Mobil Lubricants (P.) Ltd. [2020] 118 taxmann.com 51 (Delhi - Trib.)]................15
[Firemenich Aromatics (I) (P) Ltd. v Asst CIT [2020] 118 taxmann.com 3 (Mumbai - Trib.)] ..........15
[Boston Consulting Group (I) (P) Ltd. v Asst CIT [2020] 118 taxmann.com 352 (Mumbai-Trib.)] ...15
[Bureau Veritas Consumer Products Services (I) (P) Ltd. v Asst CIT [2020] 118 taxmann.com 218
(Delhi-Trib)]..............................................................................................................................15
[FIS Global Business Solutions India (P) Ltd. v Dy. CIT [2020] 118 taxmann.com 221 (Delhi-Trib.)]15
[Regus Business Centre (P) Ltd. v ITO [2020] 118 taxmann.com 203 (Mumbai-Trib.)] ..................15
[Rivendell PE LLD v Asst. CIT [2020] 118 taxmann.com 204 (Mumbai-Trib.)] ...............................15
[Lubrizol India (P.) Ltd. v Asst CIT [2020] 118 taxmann.com 138 (Mumbai - Trib.)] ......................16
[Laqshya Media Ltd. v Dy. CIT [2020] 118 taxmann.com 52 (Mumbai - Trib.)] .............................16
[Casio India Company (P.) Ltd. v Asst. CIT [2020] 118 taxmann.com 162 (Delhi - Trib.)]...............16
[Dania Oro Jewellery (P.) Ltd. v Dy. CIT [2020] 118 taxmann.com 14 (Mumbai - Trib.)]................16
[Star India (P.) Ltd. v Asst. CIT [2020] 117 taxmann.com 988 (Mumbai - Trib.)] ...........................16
[Banc Tec TPS India (P.) Ltd. v Asst CIT [2020] 117 taxmann.com 979 (Mumbai - Trib.)]...............16
[Dy. CIT v Piramal Enterprises Ltd. [2020] 117 taxmann.com 970 (Mumbai - Trib.)].....................16
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[Sava Healthcare Ltd. v Dy. CIT [2020] 118 taxmann.com 90 (Pune - Trib.)].................................16
[Roche Diagnostics India (P.) Ltd. v Asst. CIT [2020] 118 taxmann.com 89 (Mumbai - Trib.)]........16
[Ariba India (P.) Ltd. v Dy. CIT [2020] 117 taxmann.com 935 (Delhi - Trib.)] ................................16
[Atlas Healthcare Software India (P.) Ltd. v ACIT [2020] 117 taxmann.com 839 (Kolkata - Trib.)].16
[Techbooks International (P.) Ltd. v Asst CIT [2020] 117 taxmann.com 851 (Delhi - Trib.)]...........17
Page 4

NEWS
DIRECT TAX
1. CBDT advised banks to refund charges collected
on electronic transactions carried over modes
prescribed u/s 269SU.
[Ref: Circular 16/2020 dated 30.08.2020]
2. CBDT notifies conditions to be satisfied by
pension fund to become eligible for exemption
u/s 10(23FE).
[Ref: Notification No. 67/2020/ F. No.
370142/28/2020-TPL]
3. CBDT issues guidelines for implementation of
Faceless Assessment Scheme, 2019
[Ref: F. No. 173/165/2020-ITA-I dated
14.08.2020]
4. CBDT amends jurisdiction of income-tax
authorities under section 120
[Ref: NOTIFICATION NO. S.O. 2757 [NO.
65/2020/F.NO. 187/3/2020-ITA-I], DATED 13-8-
2020]
5. Officers of Investigation & Central Charges of
Income-tax Dept. are directed to make
electronic communication
[Ref: CIRCULAR NO. F. NO. 414/29/2020-
IT(INV.I), DATED 11-8-2020]
6. ‘E-Assessment’ now ‘Faceless Assessment’.
[Ref: NOTIFICATION S.O. 2745 (E) [NO. 60 /
2020/F.NO. 370149/154/2019-TPL], DATED 13-
8-2020]
7. CBDT issues Mutual Agreement Procedure
(MAP) Guidance following OECD
recommendations
[Ref: CIRCULAR NO. F.NO. 500/09/2016-APA-
I, DATED 7-8-2020]
*********
Page 5

DOMESTIC TAX CASE LAWS
SUPREME COURT
1. Supreme Court affirms ruling of Punjab and
Haryana High Court holding that capital gains
arising out of land acquisition compensation
were chargeable to income-tax under section
45 for previous year.
[Raj Pal Singh v CIT [2020] 118 taxmann.com
508 (SC)]
2. Notice issued and accepted by respondents in
SLP against impugned order of High Court
holding that when order under section 245D
came to be passed, respondents were not
assessees as contemplated under Black Money
Act; accordingly, provisions thereof did not
apply to them and, therefore, undisclosed
foreign income and assets of respondents had
rightly been assessed under Income-tax Act.
[Pr. CIT v Income Tax Settlement Commission
[2020] 118 taxmann.com 197 (SC)]
3. SLP granted against High Court ruling that prior
to assessment year 2011-12, there was no
provision which required revenue to disallow
deduction of loss on sale of investment made
by general insurance companies, hence same
could not have been disallowed.
[CIT v United India Insurance Co. [2020] 117
taxmann.com 849 (SC)]
4. SLP dismissed against High Court ruling that
where gain from sale of shares by assessee was
exempt from tax in terms of section 10(38),
mere non-disclosure of such gain on sale of
shares in return of income would not mean that
capital gain from sale of shares had escaped
assessment.
[Asst. CIT v Swastic Safe Deposit and
Investments Ltd. [2020] 118 taxmann.com 94
(SC)]
5. SLP dismissed as withdrawn against High Court
ruling that where Assessing Officer made
addition to assessee's income on ground that
there was mismatch between assessee's
consumption of raw material and output of
various drugs manufactured by assessee, in
view of fact that finding of Assessing Officer was
based on detailed appreciation of evidence on
record, impugned addition was to be
confirmed.
[Paras Organics (P.) Ltd. v Addl. CIT [2020] 118
6. SLP dismissed against High Court ruling that
where Assessing Officer made addition to
assessee's income in respect of unexplained
capital gain on transfer of shares on basis of
documents seized during course of search of
another person, since Assessing Officer failed to
show nexus on basis of cogent material
between documents seized and assessee,
impugned addition was to be deleted.
[Pr. CIT v Himanshu Chandulal Patel [2020] 118
********
Page 6

HIGH COURT
1. Where Settlement Commission had rejected
application of petitioner for assessment years
(AY) 2011-12 to 2017-18 as 'invalid', on ground
that there was short payment of tax, since there
were computational differences that could well
be reason for remittances falling short of
required amounts and differences were quite
insignificant in context of entirety of payment
made, in interests of justice, petitioner's case
should be considered on merits by Commission.
[Krishna Venkata Ramana Shetty v ITSC [2020]
118 taxmann.com 424 (Madras)]
2. Where Assessing Officer denied deduction
under section 80-IB on ground that area of two
plots situated in two different streets, which
assessee had considered as single project,
constituted an area of less than 1 acre each
when considered individually, but Tribunal had
allowed deduction holding that it was done as a
composite project at proposed site no
substantial question of law arose for
consideration.
[CIT v Smt. A. Jagadeeswari [2020] 118
taxmann.com 369 (Madras)]
3. Where information was received by Assessing
Officer to effect that eight parties from whom
purchases were allegedly made by assessee
engaged in job work of dying of fabrics were
alleged hawala dealers who had issued bogus
bills and he treated aforesaid amount as bogus
purchases, since without purchase of materials,
it was not possible for assessee to complete job
work of dying and entire purchases could not be
added as bogus but profit element embedded in
such transaction had to be added to total
income of assessee.
[Pr. CIT v Jakharia Fabric (P.) Ltd [2020] 118
taxmann.com 406 (Bombay)]
4. Where notices issued under section 148 had
been challenged in writ petition on ground that
assumption of jurisdiction under section 147 by
ITO was ab initio void, since notices under
section 148 had culminated into an order of
assessment which could be assailed before
appellate authority, said writ petition need not
be entertained.
[Kasautii v CIT [2020] 118 taxmann.com 407
(Jharkhand)]
5. Interest which accrues on funds not required
immediately by assessee-co-operative society
for its business purpose and which have been
only invested in specified securities as
'investment' cannot be said to be attributable
either to activity mentioned in section
80P(2)(a)(i) or in section 80P(2)(a)(iii).
[Pr. CIT v Electro Urban Co-operative Credit
Society Ltd. [2020] 118 taxmann.com 310
(Calcutta)]
6. Where assessee trust formed for running
educational institution, incurred expenses for
awareness on agriculture, medical camps etc.,
said expenses could be regarded as part of
educational activity and, thus, assessee's claim
for exemption of income under section
10(23C)(vi) was to be allowed.
[Kamaraj Educational Trust v CCIT [2020] 118
7. In case of assessee, a SEZ, while computing
deduction under section 10AA, expenses
incurred in foreign currency not meant for
rendering any services outside India, could not
be excluded from 'export turnover'.
[Renault Nissan Technology & Business Centre
India (P.) Ltd. v CIT [2020] 118 taxmann.com
279 (Madras)]
8. Where assessee challenged validity of
assessment on ground that its name had been
stuck off from Register of Companies before
passing of assessment order, in view of fact that
assessee voluntarily participated in assessment
proceedings and did not bring aforesaid fact to
notice of Assessing Officer, plea raised by
assessee was to be rejected.
[CIT v Tarachanthini Services (P.) Ltd. [2020]
Page 7

9. Where Assessing Officer rejected assessee's
claim for deduction under section 36(1)(iii) on
ground that assessee had given interest free
loan to its holding company, in view of fact that,
assessee failed to prove that said loan was
given for commercial purpose i.e. construction
of residential project in joint venture with
holding company, impugned disallowance was
to be confirmed.
[Hansa Estates (P.) Ltd. v Asst. CIT [2020] 118
10. Where Assessing Officer having regard to
volume of investment in shares and quantum of
dividend income earned thereon, invoked
provisions of Rule 8D of 1962 Rules, read with
section 14A and enhanced amount of
disallowance for earning exempt income,
disallowance so made was to be confirmed.
[FLSmidth (P.) Ltd. v Dy. CIT [2020] 118
11. Merely because liability had remained
outstanding for more than three years and
same was not written back in profit and loss
account, application of provisions of section
41(1) could not be made to consider such
liability as income for year under consideration
without there being any remission or cessation
of liability.
[Pr. CIT v Adani Agro (P.) Ltd. [2020] 118
taxmann.com 307 (Gujarat)]
12. In order to claim benefit of set-off of losses
under section 72A, condition of filing Form No.
62 is only directory and non-compliance thereof
would not disentitle assessee to claim carry
forward losses to be set off against profits of
company.
[Pr. CIT v Lotte India Corporation Ltd. [2020]
13. When assessee gets shares of amalgamated
company in lieu of shares of amalgamating
company, a 'transfer' does take place within
meaning of section 2(47).
[CIT v Nalwa Investment Ltd. [2020] 118
taxmann.com 278 (Delhi)]
14. Where assessee developed software technology
park and gave certain properties in said park on
lease to different software companies, rental
income earned by assessee from leased out
properties was liable to tax as 'business
income'.
[Pr. CIT v Khivraj Motors (P.) Ltd. [2020] 118
15. Process of sieving carried out by assessee in its
SEZ unit in order to separate dust particles from
raw material such as silicon, sand and waste
before reselling same as semi finished product
in market amounted to 'manufacturing' and,
thus, assessee was eligible to claim exemption
under section 10AA.
[CIT v Vetrivel Minerals [2020] 118
16. Where assessee had failed to produce any
material to authenticate his contention that
cash deposits in his account were on account of
sales being made by him from Kirana business,
tax authorities were justified in making addition
of unexplained cash entries in bank account in
hands of assessee.
[Ravinder Kumar v ITO [2020] 118
17. Where assessee's claim for exemption of profit
under section 47(v) in respect of sale of land to
holding company was rejected on ground that
certain shares of assessee company were held
by nominees of holding company, in view of
fact that nominees had no individual rights in
said shares and those shares were held by them
merely on behalf of holding company,
impugned order rejecting assessee's claim was
to be set aside.
[CIT v Shardlow India Ltd. [2020] 118
18. Where in block assessment proceedings
Tribunal finding that assessee had already
disclosed contrived loss by making necessary
entries in its books of account, allowed
assessee's claim for deduction of same, order so
passed did not require any interference.
Page 8

[CIT v Naman Associates [2020] 118
taxmann.com 165 (Gujarat)]
19. Where assessee received certain amount from
subsidiary company as advance towards
security for providing corporate guarantee, it
could not be brought to tax as deemed dividend
under section 2(22)(e).
[CIT v Accel Limited [2020] 118 taxmann.com
103 (Madras)]
20. Where Tribunal, without assigning any reasons,
concluded that properties exchanged between
assessee and his brother in terms of settlement
deed did not attract provisions of section 2(47),
matter was to be remanded back for disposal
afresh.
[Pr. CIT v S. Yogarathnam [2020] 118
21. Where there was no co-relation between
unexplained cash receipts and unexplained
investment of assessee-broker unearthed
during course of search, assessee was not
entitled to claim set-off of said income against
unexplained investment made.
[CIT v Manojbhai Bhupatrai Vadodaria [2020]
118 taxmann.com 109 (Gujarat)]
22. Where assessee raised a plea that while
remanding matter to assessing authority,
Tribunal had given certain directions and its
views about exchange fluctuations to be treated
as speculative loss or business loss and,
therefore, it was not an open remand which
was likely to prejudice case of assessee,
Assessing Officer was to be directed to pass
fresh orders, uninfluenced by any observations
made by Tribunal.
[Capricorn Food Products India Ltd. v Asst CIT
[2020] 118 taxmann.com 68 (Madras)]
23. Repeated adjournments for orders or for
pronouncement of judgment where arguments
have been heard and orders have been
reserved would not be permissible even during
lockdown.
[DALBIR SINGH v SATISH CHAND [2020] 118
24. Withholding of refund under section 241A,
pursuant to notice under section 143(2),
without recording justifiable reasons is not
justified.
[Cooner Institute of Health Care & Research
Centre (P.) Ltd. v ITO [2020] 118 taxmann.com
69 (Delhi)]
25. Where assessee, running a hotel, incurred
certain expenses on renovation and repair of
hotel rooms, same was to be allowed as
deduction under section 37(1).
[Pandian Hotels Ltd. v Dy. CIT [2020] 118
26. Where Assessing Officer initiated reassessment
proceedings on ground that assessee had raised
excess claim of depreciation in respect of water
supply and drainage system, in view of fact that
said reason for reopening of assessment was
subject matter of proceedings under section
143(3) and thereupon proceedings under
section 263, once again, for very same reason,
power under section 147 could not be invoked
and, thus, impugned reassessment proceedings
were to be set aside.
[CIT v Neyveli Lignite Corporation Ltd. [2020]
27. Where assessee had requested for stay on
demand for recovery of tax under section 220
contending that prepaid taxes lying with
revenue were higher as compared to 20 per
cent of disputed demand and interim stay was
granted, but it was found that assessee mislead
High Court in preliminary hearing of petition
which led to passing of interim order, writ
petition was to be dismissed with cost.
[Indus Towers Ltd. v Asst. CIT [2020] 117
28. Amount of stale demand drafts not claimed by
customers and which had become barred by
limitation could not be treated as income of
bank.
[CIT v City Union Bank Ltd. [2020] 118
Page 9

29. In absence of a statutory provision, a duty
cannot be cast upon legal representatives to
intimate factum of death of assessee to
department and, thus, where Assessing Officer
issued a notice to assessee under section 148
after his death and, in such a case, it could not
have been validly served upon assessee, said
notice being invalid, was to be quashed.
[Savita Kapila v Asst CIT [2020] 118
30. Where during search conducted upon a partner
of assessee-firm, Assessing Officer clearly
recorded satisfaction that document found
contained details with regard to sales, gross
profit and net profit of assessee-firm and,
further, said partner had recorded statement
on oath that he had received his share profit
from assessee firm, no return of income was
filed by assessee, section 158BD notice issued
against assessee-firm was justified.
[Sri Venkatesha Bottles v Asst. CIT [2020] 118
taxmann.com 91 (Karnataka)]
31. In existence of an alternative and efficacious
remedy, it would be improper for a writ court to
exercise its jurisdiction and, thus, question as to
whether notice issued under section 147 is
justified or not is a question of fact and as
questions of fact cannot be gone into by a writ
court, it would necessarily have to be
considered by concerned authorities.
[Telekom Malaysia Berhad v UOI [2020] 118
taxmann.com 87 (Karnataka)]
32. Where assessee had been granted stay of 80
per cent disputed demand subject to payment
of 20 per cent demand, in view of fact that
there had been attachment of bank account,
attachment already resorted to would be
limited to 20 per cent of demand.
[Monarch v ITO [2020] 118 taxmann.com 88
(Karnataka)]
33. Where assessee invested sale proceeds of old
asset in new property before due date of filing
belated return and took possession within three
years, she was entitled to exemption under
section 54F though she had not invested sale
proceeds in Capital Gain Account Scheme
before due date of filing of return under section
139(1).
[CIT v Smt. Umayal Annamalai [2020] 118
************
Page 10

INCOME TAX APPELLATE TRIBUNAL
1. Where assessee earned interest income from
fixed deposit (FD) receipts with bank which
were made by assessee in course of its trading
business of import for purpose of re-export, for
obtaining letter of credit for its purchases, same
was to be assessed as business income.
[Zaveri & Co. (P.) Ltd v Dy. CIT [2020] 118
taxmann.com 429 (Ahmedabad - ITAT)]
2. Addition made on estimation basis under
section 44AD without rejecting books of
account is unjustified. Where assessee's
turnover exceeded Rs. one crore but it failed to
get accounts audited under section 44AB, in
such a case, Assessing Officer could make
addition to assessee's income on estimation
basis under section 44AD only after rejecting
books of account and thereafter passing a best
judgment assessment order under section 144.
[Sayqul Islam v ITO [2020] 118 taxmann.com
347 (Gauhati - Trib.)]
3. Whether once borrowing made through
debentures and utilized for business had been
established through agreements and
correspondences and no contrary evidence had
been placed, then claim of loss could not be
rejected.
[Shivsagar Builders (P.) Ltd. v Asst. CIT [2020]
118 taxmann.com 349 (Delhi - Trib.)]
4. Where assessee company claimed expenditure
in respect of professional charges paid for
investment advisory services and interest
expenditure paid towards capital borrowed,
since assessee was not carrying on any business
during year and, thus, said professional fees
was not paid in course of business activity and,
further, interest expenditure was also not with
respect to capital borrowed by assessee for
purpose of business, such professional fees and
interest paid could not be allowed.
[Quippo Telecom Infrastructure (P.) Ltd. v Asst.
CIT [2020] 118 taxmann.com 345 (Delhi - Trib.)]
5. Expenditure incurred by assessee on
implementation of software for smooth
functioning of business, was to be allowed as
deduction under section 37(1).
[Triveni Engineering & Industries Ltd. v Addl
CIT [2020] 118 taxmann.com 301 (Delhi - Trib.)]
6. Where assessee challenged addition of long
term capital gain arising from sale of land on
ground that agrrement to sell said land was
cancelled subsequently by executing a
cancellation deed, in view of fact that
possession of land was never handed over by
assessee to third party, on said count alone,
provisions of section 2(47)(v), read with section
53A of Transfer of Property Act, 1882, would
not be applicable and, thus, impugned addition
was to be deleted.
[Futura Polyster Ltd. v ITO [2020] 118
taxmann.com 243 (Mumbai - Trib.)]
7. Where in course of reassessment proceedings,
Assessing Officer disallowed business
counseling charges paid to two companies, in
view of fact that those companies were not
traceable and their presence, infrastructure and
nature of services rendered by them were also
not proved at all, impugned disallowance was
to be confirmed.
[Jaee Vishwas Joshi v Asst. CIT [2020] 118
8. As far as deduction under section 80P(2)(d) is
concerned, said provision does not make any
distinction in regard to source of investment by
co-operative society and, thus, in such a case,
revenue is not required to look to nature of
investment whether it is from surplus funds or
otherwise.
[Mantola Co-operative Thrift & Credit Society
Ltd. v ITO [2020] 118 taxmann.com 276 (Delhi -
Trib.)]
9. Commissioner (Appeals) could not confirm
penalty order passed under section 271AAA
merely on ground that written submissions filed
against said order did not bear signature of
assessee.
[Keshavlal Devkaranbhai Patel v Asst CIT
[2020] 118 taxmann.com 223 (Rajkot - Trib.)]
Page 11

10. Where in respect of sale of property by
assessee, Assessing Officer made addition to
taxable income by invoking provisions of
section 50C, in view of fact that valuation of
property sold on basis of stamp duty valuation
as on date of registration had been determined
without referring matter to DVO, impugned
addition made by Assessing Officer was to be
deleted.
[Ramesh Govindbhai Patel v ITO [2020] 118
taxmann.com 201 (Ahmedabad - Trib.)]
11. Where in respect of relevant year, Asseessing
Officer disallowed interest payments under
section 40(a)(ia) without verifying as to whether
assessee was to be treated as assessee in
default or not, in view of second proviso to
section 40(a)(ia) coming into effect from 01-04-
2012 by Finance Act, 2012, impugned
disallowance was to be deleted and, matter was
to be remanded back for disposal afresh.
[BBR Projects (P.) Ltd. v ITO [2020] 118
taxmann.com 133 (Hyderabad - Trib.)]
12. Expenses wholly and exclusively incurred by a
pharmaceutical company in normal course of its
business towards gifts as product reminders,
travel facilities of doctors, conference of
doctors or similar freebies to medical
practitioners or their professional associations
would not be hit by Explanation 1 to section
37(1).
[Medley Pharmaceuticals Ltd. v Pr. CIT [2020]
118 taxmann.com 44 (Mumbai - Trib.)]
13. Where assessee had substantially complied
with provisions of section 54(1) by purchasing
new house property within prescribed time
period, a mere non-compliance of procedural
requirement under section 54(2) i.e. some delay
in depositing amount in CGAS, could not stand
in way of assessee in getting benefit under
section 54.
[ITO v Smt. Rekha Shetty [2020] 118
taxmann.com 10 (Chennai - Trib.)]
14. If directors, in terms of Board resolution, were
entitled to receive commission for rendering
services to company and if it was in terms of
employment on basis of which they had been
rendering services, then such
remuneration/commission would be part and
parcel of salary.
[Dy. CIT v Abro Technologies (P.) Ltd. [2020]
15. Where placement charges were paid by
assessee to cable operators/MSOs for placing
signals on a preferred band, it was a part of
work of broadcasting and telecasting covered
by sub-clause (b) of clause (iv) of explanation to
section 194C.
[Star India (P.) Ltd. v Asst. CIT [2020] 117
16. Where pursuant to scheme of amalgamation as
approved by High Court, a company was
merged with assessee company and
amalgamating company was not in existence at
time of conduct of assessment proceedings as
well as on date of passing Assessment Order,
Assessment Order passed in name of
amalgamating company being void ab initio was
to be set aside.
[Genpact India (P.) Ltd. v Dy. CIT [2020] 118
taxmann.com 40 (Delhi - Trib.)]
17. Where appellant, Bar Council of India was
engaged in safeguarding rights, privileges and
interest of advocates, thus, its dominant
purpose being of advancement of general
public utility, it would be entitled for
registration under section 12AA and
consequent exemption under section 80-G.
[Bar Council of Delhi v CIT [2020] 117
18. Agricultural land purchased by assessee was not
governed by provisions of section 56(2)(vii)(b)
since said land was not capital asset as per
section 2(14) and hence, no addition could be
made in hands of assessee.
[Mubarak Gafur Korabu v ITO [2020] 117
taxmann.com 828 (Pune - Trib.)]
Page 12

19. Where assessee was in business of commodity
derivatives and revenue had also accepted
income from transactions of assessee as
business income and not as income from
speculation for all earlier years, if owing to
suspension of operations by NSEL, assessee
could not recover amounts from brokers which
were advanced for purchase of commodities;
such loss was allowable under section 28.
[Chowdry Associates v Asst. CIT [2020] 117
20. Provisions of section 43CB prescribing
percentage completion method for determining
profits and gains of a construction company are
to be applied mandatorily with effect from 01-
04-2017 i.e. assessment year 2017-18 onwards
and, therefore, assessment completed in case
of assessee, a construction company, on basis
of project completion method in relevant
assessment year could not be declared as
invalid on aforesaid ground.
[Hi-tech Estates & Promoters (P.) Ltd. v Pr. CIT
[2020] 117 taxmann.com 965 (Cuttack - Trib.)]
21. In case of public limited company, issue of
shares to Qualified Institution Buyers ( QIB)
would be regarded as issue of shares to 'public'
and, thus, expenses incurred on said issue
would be eligible for deduction under section
35D.
[Yes Bank Ltd. v Dy. CIT [2020] 117
22. Where assessee claimed legal and professional
charges in respect of huge project sold in earlier
assessment year, a part of said expenses was
bound to spill over to next year and, thus,
assessee's claim for deduction in relevant year
could not be rejected on ground of prior period
expenses.
[Supreme Build Cap (P.) Ltd. v Asst. CIT [2020]
23. Only probability and likelihood to find error in
assessment order is not permitted under
section 263, Commissioner ought to find out
specific error in assessment order.
[Abdul Hamid v ITO [2020] 117 taxmann.com
986 (Gauhati - Trib.)]
24. Where claim of additional depreciation on
goodwill subsequent to amalgamation was not
made in return of income, there was no
restriction in entertaining a fresh claim of
deduction during assessment.
[Banc Tec TPS India (P.) Ltd. v Asst. CIT [2020]
***********
Page 13

INTERNATIONAL TAXATION CASE LAWS
1. Where Taxpayer was a citizen of United
Kingdom and holder of a working holiday visa
under subclass 417 and earned 'working holiday
taxable income' in Australia, she had been
rightly assessed to tax in accordance with rates
set out in Pt. III of Sch. 7 of Income Tax Rates
Act, 1986.
[Addy v Commissioner of Taxation [2020] 118
taxmann.com 267 (FC-Australia)]
2. Where Canadian Bank advanced huge loan to a
Canadian companywhich sold its interest in a oil
field to UK company in exchange of various
sums including an entitlement to future
contingent royalty payments and to repay Bank,
it formally assigned to Bank its rights to future
payments from UK company, bank's rights
amounted to "immovable property" under
UK/Canada double tax treaty Article 6(2)thus,
royalty payments made by UK company would
be taxable in UK.
[Royal Bank of Canada v Commissioners [2020]
118 taxmann.com 77 (UKFTT)]
3. Where assessee, a resident company, entered
into agreement with a UK based company to
produce, complete and deliver a feature film on
payment of certain agreed consideration, in
view of fact that said agreement was entered
into between assessee and non-resident
company on Principal to Principal basis and,
assessee did not participate in management,
control and capital of said company, provisions
of article 10 of India-UK DTAA would not apply
and, thus, amount remitted to UK based
company was not taxable in India.
[Next Gen Films (P.) Ltd. v ITO [2020] 118
4. Where assessee, a Denmark based company,
received certain amount from its Indian group
concern towards reimbursement of cost for
rendering administrative services, amount so
received was not taxable in India as 'fee for
technical services' under article 13 of India-
Denmark DTAA.
[Damco International A/S v Dy. CIT [2020] 118
5. Where assessee received management fee from
Indian company to support it in carrying on
business efficiently and in line with business
model, policies and best practices and these
services did not make available any technical
knowledge, skill, know-how or processes to
Indian company, such fees would not be fees
for technical services.
[Edenred (P). Ltd. v Dy. DIT [2020] 118
**********
Page 14

TRANSFER PRICING CASE LAWS
1. Where remand order passed by Tribunal
specifically directed Assessing Officer to
carryout working capital adjustment regarding
artificial cap and to re-examine as to whether
two comparables would pass through all filters
applied by TPO, since there was a limited
remand of matter for judicious consideration
afresh, mandatory procedure prescribed under
section 144C to extent of such remand ought to
have been followed.
[Wipro GE Healthcare (P.) Ltd. v Dy. CIT [2020]
118 taxmann.com 302 (Karnataka)]
2. Where assessee made payment of certain
expenditure incurred abroad in foreign currency
without deducting tax at source and, thus, said
expenditure was disallowed by TPO, in view of
fact that a major part of said expenses was
towards reimbursement of expenses incurred
by AEs outside India and, thus, tax was not
required to be deducted on same, impugned
disallowance was to be deleted.
[Dy. CIT v Exxon Mobil Lubricants (P.) Ltd.
[2020] 118 taxmann.com 51 (Delhi - Trib.)]
3. Data to be used for comparison should be data
relating to same financial year in which
international transaction were entered by
tested party.
[Firemenich Aromatics (I) (P) Ltd. v Asst CIT
[2020] 118 taxmann.com 3 (Mumbai - Trib.)]
4. Where TPO made adjustments to assessee's
ALP in respect of various payments made to AE
such as payment of licensing fee for time and
billing software, payment of regional
administration cost allocation and payment of
information technology cost allocation etc.
without following any of methods prescribed
under section 92C, impugned adjustments
deserved to be set aside.
[Boston Consulting Group (I) (P) Ltd. v Asst CIT
[2020] 118 taxmann.com 352 (Mumbai-Trib.)]
5. Where assessee paid discount to various
affiliates of overseas AEs in India in respect of
sale of software testing services in terms of
MOU entered into with AEs, Assessing Officer
could not disallow entire payments so made
without examining those terms of MOU
available before him at time of assessment.
[Bureau Veritas Consumer Products Services (I)
(P) Ltd. v Asst CIT [2020] 118 taxmann.com 218
(Delhi-Trib)]
6. Where in respect of software development
services rendered to AE, assessee entered into
Advance Pricing Agreement (APA) with CBDT, in
such a case, when undisputedly there was no
change in FAR of assessee in year under
assessment vis-à-vis years covered under APA
and, consolidated margin computed as per APA
at 19.26 per cent was much more than
consolidated margin agreed upon between
assessee and CBDT for years covered under APA
at 16.60 per cent, impugned transfer pricing
adjustment made by TPO by applying transfer
pricing principles was to be set aside.
[FIS Global Business Solutions India (P) Ltd. v
Dy. CIT [2020] 118 taxmann.com 221 (Delhi-
Trib.)]
7. In view of fact that amendment to sub-
section(2) to section 92B would be applicable
from 01-04-2015, TPO could not treat loan
transactions entered into between assessee and
its group entities located in India as 'deemed
international transactions' in assessment year in
question.
[Regus Business Centre (P) Ltd. v ITO [2020]
118 taxmann.com 203 (Mumbai-Trib.)]
8. Where due to natural calamity assessee could
not file Form No. 35A signed by concerned
director but filed a scanned copy of same signed
by director residing in other country before DRP
with a bonafide intention to meet deadline for
filing its objections against draft assessment
order, impugned order rejecting Form No.35A
was to be quashed.
[Rivendell PE LLD v Asst. CIT [2020] 118
taxmann.com 204 (Mumbai-Trib.)]
9. Following order passed by Co-ordinate Bench of
Tribunal in assessee's own case relating to
Page 15

earlier assessment year, TNMM was to be
applied for determining ALP of international
transactions relating to export of chemical
additives to AEs.
[Lubrizol India (P.) Ltd. v Asst CIT [2020] 118
10. Commercial expediency of loan is wholly
irrelevant in ascertaining ALP of interest on said
loan advanced to AE.
[Laqshya Media Ltd. v Dy. CIT [2020] 118
11. In absence of any material on record showing
that incurring of AMP expenses on behalf of AE
was a separate international transaction,
impugned addition made to assessee's ALP in
said regard was to be deleted.
[Casio India Company (P.) Ltd. v Asst. CIT
12. Where there was delay in realization of sales
proceeds from AEs of 138 days as compared to
average delay of 146 days from non-AEs, since
no interest was charged from non-AEs,
adjustment on account of notional interest for
delay in realization of sales made to AEs was
not warranted.
[Dania Oro Jewellery (P.) Ltd. v Dy. CIT [2020]
13. Where assessee, acting as agent for advertising
as well as for overseas media companies and
carried all channel subscription business., paid
certain amount towards brand license and
claimed depreciation, in view of fact that said
fee had been approved by RBI, therefore no
disallowance of expenses could be made.
[Star India (P.) Ltd. v Asst. CIT [2020] 117
14. Company having super normal profits or highly
unstable margins should not be ideally
considered as good comparable.
[Banc Tec TPS India (P.) Ltd. v Asst CIT [2020]
15. Following order passed by Co-ordinate Bench of
Tribunal in assessee's own case in earlier
assessment year, arm's length rate of guarantee
commission was to be charged at rate of 0.50
percent in respect of corporate guarantee
provided by assessee on behalf of its AEs
abroad.
[Dy. CIT v Piramal Enterprises Ltd. [2020] 117
16. Where Assessing Officer made a reference to
determine ALP of international transaction
entered into by assessee on ground there was
transfer pricing addition of more than Rs. 10
crores in earlier year, since there was no
transfer pricing adjustment of more than 10
crores in earlier year, Assessing Officers
reference to TPO was in contravention to
Instruction No. 3 of 2016 and such reference
was to be declared as invalid.
[Sava Healthcare Ltd. v Dy. CIT [2020] 118
taxmann.com 90 (Pune - Trib.)]
17. Merely because a comparable was not selected
during previous and subsequent year, it was not
necessary that same could not be accepted
during relevant year.
[Roche Diagnostics India (P.) Ltd. v Asst. CIT
[2020] 118 taxmann.com 89 (Mumbai - Trib.)]
18. Where services were received from AE in form
of platform to conduct e-auction by assessee
and, there was not an iota of material on record
showing that said services were duplicative in
nature, ALP of technical fee paid for availing of
said services could not be determined as nil.
[Ariba India (P.) Ltd. v Dy. CIT [2020] 117
19. Co. having RPT at 43.18% was to be excluded
from list of comparables if TPO applied RPT filer
of 20%.
[Atlas Healthcare Software India (P.) Ltd. v
ACIT [2020] 117 taxmann.com 839 (Kolkata -
Trib.)]
20. Where outstanding receivable from associated
enterprise was more than shareholders funds
Page 16

available with assessee implying that total profit
earned by assessee was enjoyed by its
associated enterprise out of India fully, TPO
could not be faulted in considering overdue
outstanding receivable from its associated
enterprise as a separate international
transaction and making addition on account of
arm's length price.
[Techbooks International (P.) Ltd. v Asst CIT
*************
Disclaimer: Above said information are taken
from publically available resources and believed
to be accurate.
Page 17

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