Evidence Act

The SC while disposing the PIL filed in the High-profile Sahara

Diary as reported in 77 Taxmann 245, on the issue of

admissibility of evidence has held that no direct investigation

against high public functionaries on basis of legally inadmissible

evidence. Where detailed documents recovered by the

authorities through raids on two business groups were random

loose sheets of paper and electronic data which were not

regularly kept during course of business and thus had no

evidentiary values, they could not have been relied on to direct

registration of FIR and investigation therein in case of high public

functionaries occupying important offices. The materials in

question were not only irrelevant but were also legally

inadmissible under section 34 of the Evidence Act.

Indirect Tax – Important Cases .

1. The HC of Karnataka in the case of ABM Tele mobile India as

reported in 77 Taxman.com 80, on the issue of classification and

taxability of the product under KVAT has held that Charger would

not be classifiable as Mobile even if it is sold along with Mobile.

Against the order of assessment, the assessee filed a writ

Prakash Sachin & Co Chartered Accountants Weekly Newsletter

Volume 04|2017| January 2017 Date 23/01/2017

PIL on Sahara papers

Indirect TAX

2

petition contending that the mobile battery charger sold along

with the mobile phone, in one retail package, should be treated

as taxable at the same rate as the mobile phone itself under the

Third Schedule to the Karnataka Value Added Tax Act at the rate

of 4 per cent only. The controversy in the instant case is

squarely covered by the recent decision of the Karnataka High

Court rendered in the case of Lava International Ltd. v. State of

Karnataka upholding the separate rate of tax on the mobile

battery charger sold along with the mobile phone itself, under

the provisions of the KVAT Act, following the decision of the

Supreme Court in the case of State of Punjab v. Nokia India (P.)

Ltd. [2015] 49 GST 277/ [2014] 52 taxmann.com 410. [Para 1]

The contention of the assessee does not appear to be sound as

the ratio of the Supreme Court decision in the case of Nokia

India (P.) Ltd. (supra) is very clear that the mobile battery

chargers cannot be treated as part of the mobile phones itself

and they are mere accessories of the mobile phone and are to be

taxed separately irrespective of their packing in the common

package with mobile phones.

2. The HC of Bombay in the case of Arihan Telecommunication

as reported in 77 Taxmann 81 on the issue of limitation for the

filling of first appeal has held that where after passing original

order corrigendum was issued for correcting mistake in order,

limitation for filing appeal before Commissioner (Appeals) would

be counted from date of corrigendum. Adjudicating Authority

passed original order on 31/10/2012. Thereafter some mistake

was noticed in above order and corrigendum was issued on

31/12/2012 for correcting mistake in order. Subsequently

assessee filed appeal before Commissioner (Appeals) on

27/02/2013. Commissioner (Appeals) dismissed appeal on

ground that same was not filed within limitation. The court held

that appeal period must be computed from date of corrigendum .

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3

It was held that if corrigendum was considered, then appeal

would be within limitation. Therefore, Commissioner (Appeals)

was to be directed to consider appeal filed by assessee on

merits.

3. The HC of Delhi in an important case on the issue of Luxury

Tax, in the case of Community Welfare Banquet association as

reported 77 Taxmann .com 45 has held that no luxury tax on

sale of luxury items subject to DVAT. Rule 3(2)(b)(ii) of the Delhi

Tax on Luxury Rules, 1996 which mandates Banquet Hall Owners

to include entire value of turnover to determine Luxury Tax

regardless of whether substantial part or whole of it is subjected

to VAT levy is totally against scheme of parent Act, i.e., Delhi

Tax on Luxury Act, 1996. It further held that when State

Legislature has specifically excluded all luxury items which are

also subjected to DVAT levy, impugned rule is ultra vires and is

to be quashed and set aside.

4. The CESTAT Mumbai bench allowing the appeal of the

Crompton Greaves on the issue of classification of goods as

reported in 77 Taxmann.com 181 has held that devises like PM-2

Controller, Variable Speed Driver Controller classifiable as

Automatic regulating instrument. Products, namely, Advanced

variable speed drive controller, PM-2 controller, HESG-101

governor and Cogen-C system would be covered under Heading

9032 of Acetate distinguishing feature between Heading 8537

and Heading 9032 is that Heading 8537 is meant for equipment

meant for 'electric control or distribution of electricity'. The

Heading 90.32 covers 'automatic regulating or controlling

instruments and apparatus like thermostats and pressure

switches, etc.' It is seen from the tariff description and

connected Explanatory Notes that if the device is meant for

electric control or the distribution of electricity does it qualify to

be classified under Heading 8537. In the instant case, the

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4

devices are designed for control of speed in case of AVS drive

controller, control of torque in case of PM2 soft start energy

saving motor controller, control of inlet valve for turbines in case

of HESG-101, and control of steam inlet valve in case of Cogen-C

system. It is seen that these goods are not meant 'for electric

control or the distribution of electricity'. Therefore, these do not

qualify to be classified under Heading 8537 claimed by the

revenue.

5. The HC of Delhi in the case of DIAL as reported in

77Taxmann.com 92 has held that Where CBEC exercising its

powers under sections 141(2) and 157 of Customs Act notified

Handling of Cargo in Customs Areas Regulations, 2009 and

regulation 6(1)(l) thereof obliged customs cargo service

providers not to charge demurrage in certain cases, said

regulation did not violate articles 14 and 19(1)(g) of

Constitution. Thus, where CBEC exercising its powers under

sections 141(2) and 157 of Customs Act notified Handling of

Cargo in Customs Areas Regulations, 2009 and regulation 6(1)(l)

thereof obliged customs cargo service providers not to charge

demurrage in certain cases, said regulation did not violate

articles 14 and 19(1)(g) of Constitution.

6. The CESTAT Mumbai bench in the case of Drishti Adventure

as reported in 77 Taxmann 182 on the issue of classification

relaying on the Notification 21/2002-Cus., dated 1-3-2002 and

Board Circular No. 1/2005-Cus., dated 11-1-2005has held that

sports boat couldn't be classified as excursion boat just because

it was used for ferrying. Assessee filed bill of entry dated 15-2-

2005 for clearance of imported boats declared as excursion

boats. It claimed that though manufacturer termed these boats

as sport boats, they were meant for ferrying persons from one

station to another station in Goa and hence they were to be

classified under heading 8901. Adjudicating Authority having

Indirect TAX

5

noticed that imported boats had been marked as sports boats by

manufacturer and they were commercially and functionally

known as sports boats only, classified said boats under heading

8903. Thus, since Port Officer, Government of Goa, registered

said boats as motor boats though assessee had declared these

boats as excursion boats, boats in question would merit

classification only under heading 8903 as motor boats.

7. The CESTAT Delhi Bench in the case of Fortune Park Hotels as

reported in 77 Taxmann 183 on the issue of chargeability of the

service tax on the reimbursement of the expenses held that

amended definition of consideration under service-tax has

prospective effect. Reimbursable expenses collected by services

provider from service recipient could not be held to be a part of

value of services being provided by services provider and same

could not be subjected to service tax. Assessee was in business

of operating hotels under its various brands. Any entrepreneur

interested in running a hotel under assessee's banner signed an

operating agreement with assessee to operate hotel under one

of brands of assessee - Thereupon assessee sent its employees

to such hotel for working therein and to ensure that proper

standards were maintained in actual operation of hotel. Assessee

directly paid salary to its above employees and same was

reimbursed by hotel on actual basis without any mark-up to

assessee. Adjudicating Authority levied service tax on expenses

reimbursed by hotel to assessee under section 67. The Delhi

High Court in the case of Intercontinental Consultants and

Technocrats (P.) Ltd. v. UOI [2012] 38 STT 75/28 taxmann.com

213 has held that reimbursable expenses cannot form part of the

gross value of the services being provided by the service

provider. In the instant case, the salary of the employees being

sent by the assessee to the hotel is being paid by the assessee

directly to the employees and the same is being reimbursed by

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6

the hotel without any mark-up. As such, in terms of the law

declared by the High Court such reimbursable expenses collected

by the services provider from the service recipient cannot be

held to be a part of the value of the services being provided by

the assessee and the same could not be subjected to service tax

under section 67. Apart from the fact that the issue is covered

by the earlier decision of the Delhi High Court, the demand is

barred by limitation having been raised by invoking longer period

of limitation. The issue involved is a bona fide issue of

interpretation of legal points which were the subject matter of

various decisions. As such, it cannot be said that there was any

suppression or misstatement with any mala fide intention to

evade tax on the part of the assessee, thus justifying invocation

of longer period of limitation. In view of the aforesaid, the

demand of service tax upon the assessee was liable to be set

aside.

8. The Delhi CESTAT Bench in the case of Hindustan

Copper as reported in 77 Taxmann.com 154 on the

issue of Input tax credit has held that no reversal of

input credit when dept. failed to identify type of inputs

retained by job worker. The assessee was engaged in

manufacture of copper and it sent anode scrap, etc. for

conversion into copper to a job worker and was availing

CENVAT credit on inputs and Adjudicating Authority

demanded certain amount of credit from assessee

under rule 14 on plea that it was not paying amount

equal to CENVAT credit attributable to inputs which

were not received back from job worker, since

Adjudicating Authority did not identify which type of

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7

inputs were retained by job worker, it was not tenable

to invoke rule 14 to demand amount of credit .

9. In an important case under VAT/CST, the HC of Gujarat

in the case of Reliance Industries as reported in 77

Taxmann.com 112 held that VAT exemption on intra-

State sale would also available on inter-State sales. In

terms of Entry No. 69 of exemption notification issued

by State of Gujarat under section 5(2) of Gujarat VAT

Act, which reads as: Sales of Liquefied Petroleum Gas

(LPG) for domestic use by consumers of State, inter-

State sales of LPG for domestic use from State of

Gujarat would invite nil rate of tax under section 8(1)

of CST Act. Assessee, a registered dealer under Gujarat

VAT and under CST was engaged in refining and sale of

petroleum products in State of Gujarat. During year, it

had sold LPG for domestic use inside State in course of

intra-State sales and outside State in course of inter-

State sales. It claimed that since whole of tax on such

sale was exempt under Entry 69 issued under

notification by Government of Gujarat in exercise of

powers under section 5(2) of VAT Act, it had not

collected tax on sale made in course of inter-State

sales, relying on provisions of section 8(1) of CST Act.

AO held that Entry 69 was amended with effect from

03/10/2008 and with addition of words 'by consumers

of State' in said entry intra-State sales of LPG would

continue to be exempt, but inter-State sales of LPG

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8

subsequent to 03/10/2008 was liable to tax under CST

Act In view of statutory provisions contained in

sections 6,8,14 and 15 of CST Act, addition of words

'by consumers of State' in Entry 69 with effect from

03/10/2008 would have no effect on levy of tax on

inter-State sales of LPG for domestic use and inter-

State sales of LPG would invite nil rate of tax under

section 8(1) of CST Act .

10. The SC granted SLP on the revenue appeal in the

case of as Ultra Tech Cement as reported in 77

Taxmann 155 to decide admissibility of CENVAT Credit

on outward transportation. The SLP has been granted

against the HC of Karnataka order as reported in 71

Taxmann 357. Assessee was availing CENVAT credit on

service tax paid on goods transport agency services

availed for outward transportation of goods from its

factory to customer's premises. Appellate Authority

having found that goods were delivered by assessee on

FOR basis and it was responsibility of assessee to

deliver goods in good condition till it reached

destination, held that assessee had satisfied all three

conditions of Board Circular No. 97/8/2007 - S.T.,

dated 23-8-2007 and thus CENVAT credit was available

to it. Tribunal upheld order of Appellate Authority.

Revenue contended before High Court that (i) whether

requirements of Circular dated 23/08/2007 were

complied with or not had not been examined by

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9

Tribunal, (ii) whether CENVAT credit would be available

on service tax paid on GTA service availed by assessee

had not been gone into by Tribunal, and (iii) under

circumstances, even if Circular dated 23/08/2007 was

found to be acceptable, then also matter ought to have

been remanded by Tribunal instead that Tribunal

dismissed appeal. Revenue also contended that there

was a decision of Kolkata HC in case of CCE v.

Vesuvious India Ltd. [2013] 40 taxmann.com 384/42

GST 543, wherein HC considered above Circular dated

23/08/2007 and found that rules could not be amended

by Circular and matter was carried before Apex Court

and same was to be listed for hearing. HC held that

when finding of fact arrived at by Appellate Authority

was already concluded and not challenged before

Tribunal, such finding of fact should be outside scope of

judicial scrutiny of High Court. It further held that

Bench did not find that merely because matter was

carried before Apex Court against decision of Calcutta

High Court, there would be any case for consideration.

It dismissed appeal of revenue on ground that no

substantial questions of law arose for consideration.

Hence SLP filed against judgment of High Court was to

be granted.

10

Indirect Tax – Notification and Circulars

CBEC increases rate of excise duty from 8% to 12.5% for

vehicles falling under Miscellaneous heading of CETA.

Amendment in notification no 12/2012-C.E., DATED 17-3-

2012 Notification no.2/2017-C.E., DATED 11-1-2017.

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.12/2012-Central Excise, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R. 163(E), dated the 17th March, 2012, namely:— In the said notification, in the Table, after serial number 277 and the entries relating thereto, the following serial number and entries shall be inserted, namely:—

(1) (2) (3) (4) (5) "277A 8702 90 21, 8702 90 22, 8702 90 28 or 8702 90 29 All goods 12.5% -";

Govt. exempts excise duty on Plain Tamarind Kernel

Powder for the period July 19, 2011 to July 18, 2016

January 14, 2017. Notification No.1/2017-C.E. (N.T.),

dated 11-1-2017.

Whereas the Central Government is satisfied that according to a practice that was generally prevalent regarding levy of duty of excise (including non-levy thereof) under section 3 of the Central Excise Act, 1944 (1 of 1944), (hereinafter referred to as the said Act), on Plain (Un-modified) Tamarind Kernel Powder falling

Indirect TAX

11

under heading 1302 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the said goods), was not being levied according to the said practice, during the period commencing on the 19th day of July, 2011 and ending with the 18th day of July, 2016;

2. Now, therefore, in exercise of the powers conferred by section 11C of the said Act, the Central Government hereby directs that the whole of the duty of excise payable under section 3 of the said Act on the said goods but for the said practice, shall not be required to be paid in respect of the said goods on which the said duty of excise was not levied during the period aforesaid in accordance with the said practice.

Amendment in the procedure for registration under DVAT & CST. Amendment in earlier circular No 6 dated 17/05/2016. Circular No 20 OF 2016-17 [NO.F.3 (521)/POLICY/VAT/2015/1046-51], DATED 13-1- 2017

In partial modification of this department's Circular No. 06 of 2016-17, Dated 17-5-2016 and in keeping with the reforms being undertaken, under 'Ease of Doing Business' in Department of Trade and Taxes, GNCTD, it has been decided to further ease the procedure for grant of registration under DVAT & CST Act, as under.

1. The applicant dealer, applying through DVAT M-Sewa, would be granted registration preferably within 01 day, for which no VATI verification would be required.

2. The provision of providing Bank Account details, at the time of applying for registration under DVAT & CST Act, as envisaged in Form DVAT 04, Part (Column No 16) shall be optional, on the part of the applicant dealer. However, the dealer shall provide Bank Account details of the business, on or before the filing of first Return, in r/o the registered entity.

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3. The digitally signed Registration Certificate (downloadable at the dealer's end) will be granted within one day, to the prospective applicant dealer, applying through M-Sewa, replacing the old provision of granting 'Provisional' Certificate.

4. The rest of the contents of the Circular 6/2016 shall remain the same. This issues with the prior concurrence of the Commissioner, VAT.

Govt. provides flat 40% abatement under service-tax for

all tour-operator services. Amendment in the Notification

no.26/2012-ST, dated 20/6/2012.Notification no 04

/2017-ST, dated 12/01/2017

In exercise of the powers conferred by sub-section (1) of section

93 of the Finance Act, 1994 (32 of 1994), the Central

Government, being satisfied that it is necessary in the public

interest so to do, hereby makes the following further

amendments in the notification of the Government of India in the

Ministry of Finance (Department of Revenue) No.26/2012-

Service Tax, dated the 20th June, 2012, published in the Gazette

of India, Extraordinary, Part II, section 3, sub-section (i), vide

number G.S.R. 468 (E), dated the 20th June, 2012, namely:—

1. In the said notification, in the first paragraph, in the TABLE,

for Sl. No. 11 and the entries relating thereto, the following shall

be substituted, namely: —

(1) (2) (3) "11 Services 60 by a tour operator (i) (ii) (4)

CENVAT credit on inputs and capital goods used for providing the

taxable service, has not been taken under the provisions of the

CENVAT Credit Rules, 2004.

The bill issued for this purpose indicates that it is inclusive of

charges of accommodation and transportation required for such

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13

a tour and the amount charged in the bill is the gross amount

charged for such a tour including the charges of accommodation

and transportation required for such a tour.".

2. This notification shall come into force on the 22nd day of

January, 2017.

Person-in-charge of vessel is liable to pay service-tax for

transportation service availed from abroad. Amendment

in Notification No.30/2012-ST, dated 20/06/2012.

Notification No 03/2017-ST, dated 12/01/2017.

In exercise of the powers conferred by sub-section (2) of section

68 of the Finance Act, 1994 (32 of 1994), the Central

Government, hereby makes the following further amendments in

the notification of the Government of India in the Ministry of

Finance (Department of Revenue) No. 30/2012-Service Tax,

dated the 20th June, 2012, published in the Gazette of India,

Extraordinary, Part II, section 3, sub-section (i) vide number

G.S.R. 472 (E), dated the 20th June, 2012, namely: —

1. In the said notification,— (i) (ii) " 12. (iii) in paragraph I, in

clause (A), after the sub-clause (vi), the following sub-clause

shall be inserted, namely: —

"(vii) provided or agreed to be provided by a person located in

non-taxable territory to a person located in non-taxable territory

by way of transportation of goods by a vessel from a place

outside India up to the customs station of clearance in India;";

In paragraph (II), in the Table, after Sl. No. 11 and the entries

relating thereto, the following Sl. No. and entries shall be

inserted, namely: — in respect of services provided or agreed to

be provided by way of Nil 100%". transportation of goods by a

vessel from a place outside India up to the customs station of

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14

clearance in India. After Explanation III, following Explanation

shall be inserted, namely:— "Explanation IV.— For the purposes

of this notification, in respect of services provided or agreed to

be provided by way of transportation of goods by a vessel from a

place outside India up to the customs station of clearance in

India, person liable for paying service tax other than the service

provider shall be the person in India who complies with section

29, 30 or 38 read with section 148 of the Customs Act, 1962 (52

of 1962) with respect to such goods.".

2. This notification shall come into force on the 22nd day of

January, 2017.

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Income Tax- Important Cases

1. The Delhi HC in the case of Bestseller United as reported in 77 Taxmann 102 on the issue of comparability under the TP has held that a manufacturing concern couldn't be chosen as comparable for a company trading in clothes. Assessee-company was engaged in business of trading of clothes under its brand which were primarily manufactured in Asia and sold in Western Europe. It owned several wholesale entities around world responsible for selling and distributing its goods in domestic market .TPO concluded that comparable used were not appropriate having regard to nature of assessee's activities and risks it undertook .He thus made certain addition to assessee's ALP on basis of mean margin earned by his own set of comparable .Tribunal took a view that comparable used by TPO were inappropriate because all concerns were involved in manufacturing which assessee was not involved. Since findings recorded by Tribunal were based on intensive and exhaustive analysis, no substantial question of law arose therefrom.

2. On one of the important issue of taxability of royalty, The ITAT Ahmedabad bench in the case of Bombardier Transportation as reported in 77 Taxmann.com 166 has held that IT services couldn’t be held as royalty just because certain equipment were used to provide services. Where during rendition of services to assessee even if certain equipment were to be used, that by itself did not vest right in assessee to use equipment and thus, payments made by assessee could not be viewed as payments for "use or right to use" any equipment which was taxable as 'royalty' The assessee

Income TAX

16

was entitled to certain services, during rendition of which even if certain equipment were to be used, but that by itself did not result in any use of or right to use the equipment by the assessee. The service may involve use of equipment but that does not vest right in the assessee to use the equipment. Even if a part of consideration can be said to be because use of equipment by breaking down all the components of economic activity for which consideration is paid, it is neither practicable, nor permissible, to assign monetary value to each of the segment of this economic activity and consider that amount in isolation, for deciding character of that amount. Similarly, even if the payment is to be considered as payment for use of software, as is the settled legal position as on now, unless there is no transfer of copyright, there cannot be any occasion to hold it as royalty.

3. The ITAT Chennai Bench in the case of Doosan power as reported in 77 taxmann.com 175 on the issue of TP matter has held that the DRP couldn't reject objections of assessee over comparable without comparing its functional profile. The DRP rejected assessee's objections regarding exclusion of certain comparable without even comparing functional profile of those companies with that of assessee, impugned order was to be set aside. During relevant year, assessee company was rendering engineering services to its AE. To benchmark its international transactions, assessee adopted TNMM. In transfer pricing proceedings, TPO rejected some comparable selected by assessee whereas certain new comparable were selected. On basis of mean margin earned by new set of comparable, certain addition was made to assesses ALP. TPO also made addition of interest on alleged delay in collection of receivables from AEs. DRP

Income TAX

17

confirmed said addition. It was noted that about assessee's objections relating to inclusion/exclusion of certain comparable, DRP had rejected same without even comparing functional profile of those companies with that of assessee. Further, about interest on delayed receivables, from AEs, DRP had not dealt with contentions of assessee relating to commercial expediency. In view of aforesaid, impugned order was to be set aside and matter was to be remanded back to DRP for disposal afresh.

4. The ITAT Cochin Bench in the case of FCI OEN connectors as reported in 77 Taxmann.com 223 in the matter of TP has held that Internal TNM method rightly rejected when sales turnover with non-AE was insignificant. Assessment year 2011-12. Assessee had used internal TNM method for bench marking its transactions with AE - Since sales turnover of assessee with non AE was insignificant compared to its overall export turnover, internal TNMM adopted by assessee had been rightly rejected by TPO .It was further held that neither adequate details for grant of working capital adjustments had been provided by assessee in its TP study nor comparable selected by assessee had been granted working capital adjustment, claim of assessee for grant of working capital adjustment was rightly rejected On the issue of OP it was further held that receipts from sale of scrap and export entitlement should be included in operating profits. On the issue of capacity adjustment, it was held that since the assessee had not stated any specific reason for underutilization of its capacity and there was no adequate information as regard to capacity utilization of comparable, adjustment because capacity utilization could not be granted.

Income TAX

18

5. The HC of Gauhati in the case of Gauhati Metropolitan

Development Authority (GMDA) as reported in 77 Taxmann 116

on the issue of section 32 relying on the Circular No. 549, dated

31/10/1989 has held that the truck terminus with resting and

toilet facilities should be treated as plant and not as building.

Merely because resting and toilet facility were provided in truck

terminus to encourage truck drivers to park their vehicles there,

it could not be said that income from parking fee was rent from

a building rather, it would be treated as plant on which

depreciation at rate of 25 per cent was to be allowed.

Assessment year 2004-05 - Assessee was a local authority.

Assessee claimed depreciation at rate of 25 per cent for truck

terminus by considering same to be a plant. AO opined that

truck terminus was not a plant but a building and, therefore,

assessee was entitled to claim depreciation at rate of 10 per

cent. It was found that trucks were parked in truck terminus for

which parking fee was collected by assessee and it was only to

encourage truck drivers to park their vehicles in said terminus,

resting and toilet facilities were provided there. Thus, it could not

be said that these facilities were provided to earn rent from

building. Since truck terminus was a plant, and not a building,

for purpose of claiming depreciation under section 32 and hence

assessee was entitled to depreciation at rate of 25 per cent as

prescribed for plant.

6. The HC of P&H in the case of Honda Motor Cycles as reported

in 77 Taxmann 119 on the issue of TP has held that Profit margin

of comparable should be adjusted when there is strike in

organization of assessee-company. Assessee had claimed an

adjustment in operating margin of assessee because a strike in

assessee company on ground that strike adversely affected

production/sales of assessee. TPO held that there was no effect

of strike on manufacturing turnover of assessee and sales had

Income TAX

19

also increased. In view of above, TPO rejected assessee's claim.

On appeal, Tribunal further held that on happening of any

abnormal event like a strike, it would be net operating profit

margin of comparable companies, which would need adjustment

to bring both international transactions and comparable costs at

same pedestal. Since assessee had failed to bring on record any

material to affect that profit of any of comparable entities was

affected due to any strike in their premises, claim of assessee

was in negative. Since Tribunal was justified in holding that

adjustments in net operating profit margin because any strike

etc. was to be made in profit margin of comparable company but

it erred in rejecting case of assessee company and hence profit

margin of comparable company was required to be adjusted

after considering a strike like situation as had taken place in

assessee company.

7. The SC in the case of Jeans Knit as reported in 77

Taxmann.com 176 on the issue of re-assessment held that HC

couldn't uphold validity of reassessment notice when it was

contrary to decision of Apex Court. On the issue of Non-

disclosure of primary facts (Reasons to belief) the High Court

dismissed writ petitions preferred by assessee challenging

issuance of notice under section 148 and reasons which were

recorded by Assessing Officer for reopening assessment. Since

impugned order passed by High Court was contrary to law laid

down by Court in Calcutta Discount Ltd. Co. v. ITO [1961] 41

ITR 191 (SC), it was to be set aside and, matter was to be

remanded back to High Court for disposal on merits.

8. SC has granted the SLP to hear the revenue appeal in the

case of Samsung Heavy Industries as reported in 77 Taxmann

93 against the HC of Uttrakahnd order reported in 42 Taxmann

140 and to decide whether income of foreign Co. is attributable

Income TAX

20

to its Indian PE when activities performed outside India. SLP

granted against High Court's ruling that in absence of any

material on record showing that amount received by assessee, a

Korean company, from an Indian company for performing

activities outside India was attributable to business carried out

by assesses PE in India, said revenue could not be brought to

tax in India. Assessee, a Korea based company, entered a

contract between O.N.G.C. on one hand and L&T and assessee

on other hand as consortium partners - Assessing Officer took a

view that in addition to sum of money shown to have been

received, assessee had received other sums of monies under

contract which were in respect of outside India activities.

According to AO, 25 per cent of revenue received allegedly for

outside India activities, was to be brought to tax in India. HC by

impugned order held that since there was no material on record

showing that 25 per cent of gross revenue of assessee was

attributable to business carried out by PE of assessee in India,

amount in question could not be brought to tax in India. SLP

filed against impugned order by revenue granted.

9. The ITAT Kolkata Bench in the case of SanJay Agrawal as

reported in 77 Taxmann 117 on the issue of time line of

submission of 15G held that Section 40(a)(ia) doesn't specify

any time-limit for furnishing of form 15G. The payee furnishes

Form 15G after closure of accounting year, to extent recipients

included sum in their returns disallowance under section

40(a)(ia) would not be sustained in hands of payee. Assessee

had paid interest on unsecured loan - Assessee did not deduct

tax at source on ground that recipients of interest had furnished

declaration under Form No. 15G. The rejection of Form No. 15G

filed by assessee for reason that persons furnishing such forms

had given same to assessee after closure of financial year could

not be sustained because section 40(a) (ia) does not specify as

Income TAX

21

to point of time at which such declaration in Form 15G for non-

deduction of tax at source is to be given. Further the fact that

furnishing of Form 15G, requirement of section 197A had been

admittedly satisfied and assessee was entitled to benefit of

second provision to section 40(a)(ia). The AO should verify

whether recipients of interest had included such sum in their

return of income and paid taxes on same and if it was so done,

no disallowance under section 40(a)(IA) ought to be sustained in

hands of assessee.

10. The ITAT Bangalore in the case of Sealed Air as reported in

77 Taxmann 42 on the issue of TP held that TPO to reconsider

case as he didn't consider that process for searching comparable

wasn't disclosed to assessee. Where assessee-company raised

objections that it was not a full-fledged manufacturer and it was

also a trader, that TPO had wrongly applied ALP on entire

turnover and that comparable search process was not disclosed,

but said issues were not dealt with, matter was to be remanded

to TPO for fresh examination. TPO recalculated ALP on basis of 3

comparable, out of 6 comparable chosen by assessee and

remaining 3 companies were rejected because filters applied by

TPO. However, assessee alleged that search process of

comparable was not disclosed by TPO. Assessee also contended

that even though it was not a full-fledged manufacturer and it

was also a trader, TPO applied ALP on its entire turnover without

restricting same to so called manufacturing segment; that TPO

rejected ALP determined by assessee under TNMM at enterprise

level while determining separate ALP in respect of manufacturing

segment and trading segment. Assessee further argued that no

opportunity of being heard was provided to it despite it having

specifically sought in letter . It also argued that TPO did not

adjust for difference in FAR (functions performed, risks assumed

and assets employed) by comparable and that DRP relied on

Income Tax

22

report of TPO without disposing off objections raised by assessee

Hence matter was remanded to TPO for fresh examined and

adjudication.

11. The SC in an important case related to the trade discount, in

the case of Southern Motors as reported in 77 Taxmann 251 held

that trade discount is deductible under KVAT even if it is given

after sale via credit note. Trade discounts effectuated after

original sale but evidenced by contemporaneous documents and

reflected in relevant accounts are allowable. Requirement of

reference of discount in tax invoice or bill of sale to qualify it for

deduction must be construed in relation to transaction resulting

in final sale/purchase price and not limited to original sale sans

trade discount. However, transactions allowing discount have to

be proved on basis of contemporaneous records and final sale

price after deducting trade discount must mandatorily be

reflected in accounts as stipulated under Rule 3(2)(c) of the

KVAT Rules, 2005.The sale/purchase price must be adjudged on

a combined consideration of tax invoice or bill of sale as case

may be along with accounts reflecting trade discount and actual

price paid.

12. The ITAT Hyderabad Bench in the Spectrum Power as reported in 77 Taxmann 118 on the issue of determination of residential status of Individual under the India USA DTAA held that one can either include arrival date or departure date to ascertain period of stay of foreign consultant in India. Assessee, a gas based power generating unit, made payment to a U.S. professional consultant for giving advice on operation and maintenance of imported machinery .AO observed that services rendered by said consultant were technical in nature and as per provisions of section 9(1) (vii)(b), payment was liable for TDS. CIT (A) opined that professional services were liable to TDS as per article 15 as period of stay of said consultant in India was 93

Income TAX

23

days. It was found that CIT(A) made a mistake in calculating days by including day of arrival and day of departure also for period of stay and one day was to be excluded for each seven trips and, thus, period of stay would come to eighty-six days i.e. less than ninety days. Therefore, said payment was not taxable in India.

13. The HC of Kerala in the case of Sree Narayana Guru

Smaraka Sangam Upper Primary School as reported in 77

Taxmann 244 upheld that Sec. 234E is constitutionally valid as

assessee has right to appeal against TDS penalty .Section 234E

cannot be said to be unreasonable and arbitrary: It is on account

of additional work burden which has fallen upon department due

to fault of deductor that a fee has been levied .Provision is not

onerous even in absence of a right of appeal as it is always open

for aggrieved person to approach HC under writ . As per

amendment made by FA 2015, with effect from 1-6-2015, a

provision for appeal has been inserted under section 246A

against an order under sub- section (1) of Section 200A. Since

appellate remedy has already been provided, petitioner cannot

contend that impugned provision of act is unreasonable and

arbitrary.

14. The ITAT Amritsar Bench in the case of St Jude Convent School as reported in 77 Taxmann 173 relying on the Circular No. 1, dated 21-1-2015 held that Proviso to sec. 12AA has retro-effect which allows tax exemption for proceedings pending on date of registration. First proviso to section 12A(2) inserted by Finance (No. 2) Act, 2014 with effect from 1-10- 2014 has to be applied retrospectively .Where assessee, an educational society, made payment of education extension services out of its current income to Diocese of Jalandhar, notified under section 10(23C)(vi), as well as registered under section 12A and pursuing object of promoting education through running various schools, said payment was to be allowed as application of

Income Tax

24

income as it duly satisfied provisions of sections 11(1)(a) and 11(3)(d).

15. The ITAT Delhi Bench in the case of Knorr Bremse as

reported in 77 Taxmann 101, on the issue of TP has held that

ALP of services couldn't be determined as Nil just because it

hadn't increased profits of assessee. The assessee was wholly

owned subsidiary of Knorr- Asia Pacific and dealt in air brake

sets of passenger cars & wagon coaches, shock absorbers for

passenger cars & locomotives, distributor valves (DV). The

assessee also imported certain brake systems for distribution in

India. Assessee made the payments to its AE for the services

because professional consultancy management. The assessee

aggregated the above said transactions under TNMM. The TPO

was also of the view that the TNMM would not actually prove

that the services had been received and that this method

certainly did not put a value to the services, it only compared

the margin of tested party with other such comparable engaged

in similar transactions. Therefore, the TNMM was not a most

reliable method to measure the Arm's Length Price of the

international transaction for receipt of the services. He,

therefore, analysed the transactions separately under CUP

method. The TPO also held that the assessee had not been able

to substantiate that the payment for these services had

increased the profits of the assessee and made TP addition. The

DRP agreed with the reasoning of the TPO and rejected the

objection raised by the assessee. The ITAT held that As regards

to the application of method for determining the Arm's Length

Price, the method to be used to determine arm's length price for

intra-group services should be in accordance with the guidelines

in Chapters-I, II & III of the 'OECD Transfer Pricing Guidelines'

which provides the various methods to be applied and the CUP

method is likely to be a most appropriate method where there is

Income Tax

25

a comparable service provided between independent enterprises

in the recipient's market or by the AEs providing the services to

an independent enterprise in comparable circumstances. In the

present case, the TPO although applied the CUP method but

nothing was brought on record to substantiate that the AE

provided the similar services to an independent enterprise in

comparable circumstances. He also did not bring on record any

instance where comparable services were provided to an

independent enterprise in the recipient market. Therefore, in the

assesses case the CUP method was not the most appropriate

method. On the contrary, the assessee rightly applied the TNMM

method as most appropriate method because it was difficult to

apply the CUP method. Therefore, the TNMM is the most

appropriate method in the absence of a CUP which is applicable

where the nature of the activities involved, assets used, and risk

assumed are comparable to those undertaken by an independent

enterprise. In the present case, the assessee divided its

operation in the manufacturing and distribution segment. In the

manufacturing segment, the net profit margin (OP/Sales) was

disclosed at 9.26 per cent, assessee has selected 5 comparable

companies and using three years’ financial data margin of

comparable had been computed at 8.40 per cent. In the

distribution segment, the assessee has selected TNMM as most

appropriate method and the tested party margin had been

computed at 15.21 percent as compared to average margin of 6

comparable using 3 years’ financial data at 3.96 per cent and the

international transactions were claimed at arm's length.

Therefore, the impugned addition because the adjustment made

in the receipt of professional consultancy services and

management support services was not justified.

16. The ITAT Mumbai bench in the case of Krupa Trading as

reported in 77 Taxmann 177 on the issue of Section 10 B held

Income TAX

26

that interest earned by EOU on its surplus income would be

eligible for deduction under sec. 10B. Where income by way of

reimbursement of CST, interest on term deposits and interest on

deposits with Electricity Board were earned from surplus

business income of 100 per cent EOU under definition of profits

derived from export contained in section 10B (4), said income

was eligible for deduction. Assessee company was in business of

manufacture and trading of glass Beads. It filed return claiming

deduction under section 10B. AO noted that claim of deduction

included income by way of reimbursement of Central Sales Tax,

interest earned on term deposits in bank and interest earned on

deposits with Gujarat Electricity Board. It was found that every

above-mentioned income was earned from 100 per cent EOU.

The court held that the claim of assessee for deduction was quite

justified under definition of 'profits derived from export'

contained in sub-section (4) of section 10B hence said income

was eligible for deduction contemplated under section 10B (1).

17. The ITAT Chennai Bench in the case of Madura Coats as reported in 77 Taxmann 104 on the issue of TP has held that CUP method to be applied for items sold to AE when uncontrolled internal comparable were readily available. Assessee-company was engaged in business of manufacturing and selling sewing threads, yarns and industrial fabrics. During relevant year, assessee sold various types of sewing threads to its AE situated in sixty-three countries - Assessee adopted Internal TNMM to benchmark its international transactions with its AE. In TP proceedings, TPO on basis of CUP method, made certain adjustment to assessee's ALP. Since in respect of forty-nine number of items internal comparable which were totally uncontrolled, were readily available, TPO was justified in selecting CUP method over TNM method. However, in view of fact that for at least eight items, there were negative differences adjustments which were ignored by TPO, impugned adjustment

Income TAX

27

was to be set aside and matter was to be remanded back to TPO for re-computation of ALP after taking into consideration aggregate effect of negative difference adjustments as well. Further on the issue of service charges paid to the AE the TPO opined that nothing was produced by assessee to substantiate any services rendered by AE and thus determined ALP of commission payment at nil .It was noted that even though assessee plea was that primary role of AE was to identify requirements of customers and procure orders, yet no evidence whatsoever was produced in support of said plea .Moreover, assessee supplied goods to group concerns only and in such a situation one could not fathom what marketing services could have been done by AE . Thus, when assessee was unable to bring on record anything to show for what reason agency commission was paid, ALP of said payment was rightly determined at nil .

18. The ITAT Delhi Bench in the case of McKinsey Knowledge Centre as reported in 77 Taxmann 164 on the issue of TP held that a KPO unit incomparable to asset and portfolio manager. The Court held that revenue has no role in selection of comparable, which power vests with TPO alone, and job of revenue is to defend order of AO /TPO and not improving upon same. Assessee was providing research and information services to McKinsey, U.S. company, for assistance in their project - Information was required to be given to queries placed by consultants, which was obtained by accessing various internet based databases. since assessee was providing services in respect of knowledge on call, practice research and analytics group with help of many researchers, specialists and analysts by making value addition to information accessed by it from data bases, services rendered by it fell under purview of KPO services. Further a KPO service provider could not be compared to a company which was involved in raising of funds and deploying same and company providing asset management

Income TAX

28

services and portfolio management services and company providing rating services comprising of credit rating and Bank loan rating etc. was also incomparable to assessee. Further the assessee rendered ITES to its parent company vide a master services agreement. TPO held that services rendered by assessee fell under purview of KPO and, accordingly, he selected comparable and made addition Assessee contended that it was rendering help desk services, which was simplest form of BPO. It was found that assessee recruited a team of experts and no evidence had been placed on record to show nature of services rendered under segment of IT support services - Since there was no material to show exact nature of services, matter remanded be reconsidered afresh .Further on the issue of FE variation it was held that the amount of foreign exchange gain/loss arising out of revenue transactions is required to be considered as an item of operating revenue/cost, both for assessee as well as comparable. Further non-charging or under-charging of interest on excess period of credit allowed to AE for realization of invoices amounts to an international transaction and ALP of such an international transaction is required to be determined.

19. The Bombay HC in the case of New India Insurance as

reported in 77 Taxmann 107 on the issue of 194A held that

Insurance co. should spread interest on compensation on basis

of FY to determine TDS liability under sec. 194A .In case of

motor accident claim, insurance company would spread amount

of interest on compensation over relevant financial years for

period from date of filing claim petition till date of deposit before

deducting tax at source on interest under section

194A(3)(ix).Respondent No. 1- claimant sustained injuries in a

motor vehicle accident - He filed application claiming

compensation from respondent No. 2 and assessee- insurer . In

terms of award passed by Accident Claims Tribunal, assessee

Income TAX

29

insurer was required to pay interest of Rs. 1.26 lakhs to

respondent No. 1 along with principal amount of compensation.

Assessee deducted tax at source under section 194A(3)(ix) on

entire interest amount and deposited same with department -

Respondent No. 1 contended before Accident Tribunal that

assessee could not have deducted tax at source but ought to

have deposited full award amount - He thus moved execution

application praying for issuance of warrant of attachment against

assessee. Accident Tribunal allowed said application - Assessee

thus filed instant petition challenging validity of aforesaid order.

It was noted that in case of Gauri Deepak Patel v. New India

Assurance Co. [2011] ACJ 1782, High Court held that insurance

company would first spread interest amount over relevant

financial years for period from date of filing claim petition till

date of deposit. It was further concluded that if interest payable

to any claimant during any financial year exceeded Rs. 50,000,

Accident Claims Tribunal would permit insurance companies to

pay over amount liable to be deducted at source under section

194A(3)(ix) to department in respect of that claimant for said

year. Thus, on facts, action of assessee deducting tax at source

on interest awarded by Tribunal, without following mandate of

Court in Gauri Deepak Patel's case (supra) was wholly unjustified

and illegal and instant petition was to be dismissed.

20. The ITAT Mumbai Bench in the case of Niamat Mahroof Virji

as reported in 77 Taxmann 174, on the issue of 54EC held that 6

months’ investment period given under sec. 54EC should be

treated as six British Calendar Months. In terms of General

Clauses Act, 1897, period of six months mentioned in section

54EC must be regarded as six British Calendar months. Further

in respect of sale of ancestral property, assessee neither

challenged value as adopted by stamp duty valuation authorities

nor sought reference to DVO, in such a case deeming fiction of

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30

section 50C would come into operation and value as adopted by

stamp valuation authorities would be deemed to be full value of

consideration for purposes of section 48.

21. The Mumbai ITAT in the case of orient Shipping as reported

in 77 Taxmann 86 on the issue of Article 8 of India UAE DTAA

held that slot hire charges are part of shipping operations are

eligible for Article 8 benefit of India-UAE DTAA. Slot hire charges

received by assessee, UAE company, being in nature of income

earned from operation of ships in international traffic was eligible

for article 8 benefit of India-UAE DTAA and, thus not taxable in

India.

22. The ITAT Mumbai bench in the case of Quad Europe as

reported in 77 Taxmann 267 on the issue of royalty on software

held that Software payments can’t be held as royalty when

reproduction rights are given for internal usage. The assessee, a

Dutch-company, entered into an agreement with an Indian

company for sale of licensed software, in view of fact that said

agreement did not permit Indian company to carry out any

alteration or conversion of any nature, so as to fall within

definition of 'adaptation' as defined in Copyright Act, 1957 and

right given to customer for reproduction was only for limited

purpose and no right was given for commercial exploitation of

same, payment made by Indian company cannot be construed

as payment made towards 'use' of copyright and hence, could

not be taxed as 'Royalty'.

23. The ITAT Chennai Bench in the case of Ravi Shankar Rajendran as reported in 77 Taxmann.com 100 on the issue of additional evidence before ITAT allowed the assessee, a non-resident, employed by an Indian company, filed some additional evidence before Tribunal in support of his claim that salary income received by him was not taxable in India, since said

Income TAX

31

evidence were not available before authorities below, matter was to be remanded back for disposal afresh. Assessee, a non- resident, was employed by an Indian company namely IBM, India. He was on international assignment to United Kingdom ('UK') - Assessee case was that salary received from IBM India was not taxable in India. He thus filed return claiming refund of tax deducted at source. Revenue authorities opined that assessee earned salary income in India from his employer for services rendered at UK and therefore, salary earned in India was taxable as per section 5(2). It was further concluded that since assessee was a non- resident, he was not eligible to claim benefit of article 16(1) of India-UK DTAA. In appellate proceedings, assessee sought permission for filing of additional evidence in support of his claim that foreign allowances were received by him outside India. Since additional evidence filed before Tribunal were not available before authorities below, impugned order was to be set aside and, matter was to be remanded back for disposal afresh after verifying evidence filed by assessee.

24. The HC of Delhi in the case of Triune projects as reported in

77 Taxmann 40 on the issue of section 50B read with the word

“undertaking” as occurring in 2(19) (A) held that Sec. 50B

benefit available even when seller retains defunct assets while

transferring business. In a case of slump sale if certain defunct

assets or properties are left out because they would cause

inconvenience or lead to trouble for buyer, it is well within right

of seller to exclude such asset from list and such sale would

qualify for treatment under section 50B. If in case of slump sale

certain assets or properties are left out because they would

cause inconvenience or lead to a trouble for buyers, it is well

within assessee right to exclude same from list of assets -

Assessee- company, under slump sale agreement, transferred its

business undertakings as a going concern and declared

Income TAX

32

corresponding income as long-term capital gain under section

50B. In case of buyer, Court had affirmed that transaction was

not sham or colourable device. Hence merely because two

assets were retained by assessee, i.e., one in form of bad debt

and another shown to be written off, it could not be said that it

was not a case of slump sale to deny benefit of section 50B to

assessee.

25. The ITAT Chennai Bench in the case of TVS motor as reported in 77 Taxmann 105 , on the issue of AMP expenses under TP held that TP adjustment to be made for AMP exp. on brand promotion when AE had exploited economic ownership of brand .Where assessee-company incurred AMP expenses abroad for brand promotion of its AE, since legal and economic ownership of said brand was exploited by AE, TPO was justified in making addition to assessee ALP taking a view that expenses in question had to be reimbursed along with certain mark-up. During relevant year, assessee- company incurred advertisement and sales promotion expenditure for its Indonesian AE, namely, PT TVS. In TP proceedings, TPO opined that expenditure incurred towards advertisement and sales promotion should be reimbursed by AE along with mark up, however same had not been done. Accordingly, TPO made adjustment to assessee ALP which included 9.15 per cent towards mark-up - It was noted that legal and economic ownership of brand 'TVS' in Indonesia was exploited by AE and, moreover, risk associated with marketing and distribution was also to be borne by AE. It was also undisputed that benefit derived from AMP expenditure in question was not at all for assessee rather it went directly to AE. In view of aforesaid, impugned adjustment made by TPO was to be upheld. It further held that where assessee-company was following mercantile system of accounting, it could not defer receipt of royalty from AE till it achieved a fixed monthly target of sales.

Income TAX

33

26. The ITAT Ahmedabad Bench in the case of weather ford

drilling as reported in 77 Taxmann 109 on the issue of

comparability under TP held that Software product company is

incomparable to software services provider. A company engaged

both in sale of software products and services in absence of

segmental data, could not be compared to software service

provider. Further as per rule 10B (4), data pertaining to two

financial years can be used to determine ALP if it is proved that

same had any influence on transfer pricing determination.

Assessee rendered software development services to its AEs. The

Court held that a company engaged both in sale of software

products and services should be excluded since segmental data

was not available.

Direct Tax – Notification and Circulars

CIT to condone delay in payment of first instalment of IDS

in genuine cases Instruction No.2 OF 2017

[F.NO.142/8/2016-TPL (PART), DATED 16-1-2017

1. Representations have been received from field authorities and stakeholders that there has been delay in payment of 1st instalment of tax, surcharge and penalty under the IDS (the Scheme) in some cases owing to some technical errors in the system, non-deposit of cheque by collecting banks, payment made by filling wrong challan etc.

2. In this context, it is clarified that as per section 187(3) of the Scheme, non-payment of tax etc. on or before the notified dates shall render the declaration invalid and the assessee shall be liable for consequences in accordance with the provisions of section 197(b) of the Scheme.

Income TAX

34

3. However, keeping into consideration that delay in payment of first instalment in some of the cases were owing to some genuine technical difficulties, the CBDT, in exercise of the powers under section 195 of the Scheme read with section 119 of the ITA 1961, hereby directs the jurisdictional Pr CIT /CIT to accept the request for condonation of delay in payment of tax etc., payable under the Scheme in cases where payment has been made through cheque, RTGS, electronic transfer etc. on or before the date of 30th November, 2016, but the same has been credited by banks after the due date of 30th November, 2016, but on or before the 05th December, 2016.

4. This instruction may be brought to the notice of all the officers concerned and other stakeholders.

CBDT keeps indirect transfer circular in abeyance for FPIs

and FIIs. Clarification on the Indirect Transfer provision

under section 9 of ITA1961. PRESS RELEASE, DATED 17-1-

2017

Circular No. 41/2016 was issued on 21.12.2016 which dealt with clarification on Indirect Transfer provisions. After the issue of the circular, representations have been received from various FPIs, FIIs, VCFs and other stakeholders. The stakeholders have presented their concerns stating that the circular does not address the issue of possible multiple taxation of the same income. The representations made by the stakeholders are currently under consideration and examination. Pending a decision in the matter the operation of the above-mentioned circular is kept in abeyance for the time being.

CBDT press release on India Participation in JITSIC

meeting on Panama Papers. New Delhi, 20th January,

2017.

India participated in the Joint International Taskforce on Shared

Income TAX

Income TAX

35

Intelligence and Collaboration (JITSIC) meeting held in Paris on

16th and 17th January 2017 where 30 Revenue Authorities

shared their findings on investigations arising from the Panama

Papers including the role of tax intermediaries such as financial

institutions, advisers etc., who facilitate tax evasion. The

meeting included sharing of best practices and information

between participating member countries based on legal

instruments under the tax treaties and OECD and Council of

Europe Multilateral Convention. The sharing of this information

within a group of this size is unique and sets the basis for

greater cooperation amongst tax administrations.

Since the last JITSIC meeting of this group, significant achievements have been made including the development of uniform approaches to requesting information between treaty partners, clearer understanding of the evasion typologies adapted by intermediaries, and new techniques for collating intelligence. JITSIC will continue to draw on the best intelligence capabilities from tax authorities around the world and share best practices for data analysis and collaboration on intelligence. The tax administrations will, accordingly, continue to share information under existing legal frameworks for exchange.

---------------------End of the News letter ----------------------

Prakash Sachin & Co Chartered Accountants

It is a well-known and reputed firm of Chartered Accountants having its Head office

at New Delhi. The firm has its branch offices in Mumbai, Asansol &Jharkhand. The

firm has also marked its presence in overseas through its associates in different

countries across Europe & USA. The firm practice areas are Direct tax including

36

transfer pricing, International tax matter & DTAA matters, Indirect tax, Corporate

&allied law, FEMA and RBI related matters, Audit & Assurances related matters. The

most valuable assets the firm possesses are its team of experienced, knowledgeable,

talented and dedicated pool of human resources. The efficient deliveries of the work

and client satisfaction are the two-important mantra of the firm. The mantra of the

firm is “Knowledge is power. “In a very dynamic and fast changing global situation,

where the internet and social sites are used as uninterrupted flow of information and

knowledge, the organization believes in the dissemination of knowledge is the best

way to acquire it and in this process, it issues weekly updates which contains recent

changes, notification and amendments and judicial pronouncement and it is released

on every Monday. This weekly updates are known as “Weekly Bulletin” and it is

issued after thorough discussion of the team members on every preceding Saturday.

This weekly bulletin truly represents the practice areas of the firm. The firm has a

pool of CA, CS and lawyer and support staff to carry out the assignment in a very

efficient research, planning and execution in a time bound manner. The firms have

handled various assignments of auditing and taxation and guiding various clients on

taxation other management consultancy matters.

The firm has recently released a FAQ on Income Disclosure Scheme 2016 and

Equalization Levy.

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