Wednesday, August 26, 2015

[aaykarbhavan] Judgments and Infomration [4 Attachments]





Rampgreen Solutions Pvt. Ltd vs. CIT (Delhi High Court)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: , , , ,
COUNSEL:
DATE: August 10, 2015 (Date of pronouncement)
DATE: August 26, 2015 (Date of publication)
AY: 2008-09
FILE: Click here to download the file in pdf format
CITATION:
Transfer Pricing: Important law laid down on the principles for identifying comparables for benchmarking an international transaction & determining the ALP in the context of whether KPO services are comparable to BPO services. Law also laid down on whether for TNMM method, broad functionality is sufficient and whether supernormal profits indicate that there is functional dissimilarity
The High Court had to consider the principal question whether a Knowledge Process Outsourcing Services (KPO Services) provider could be considered as a comparable for benchmarking international transactions entered into by an entity rendering voice call services – such as the Assessee –with its associated enterprise by using TNMM and taking operating profit margin as the PLI .The Tribunal held that the activities of Vishal and eClerx, entities engaged in KPO Services such as data processing and analytics services were functionally similar to those of eClerx. The Tribunal concluded that voice call services and KPO services were essentially ITeS and, therefore, entities rendering the aforesaid services could be considered as comparables for the purpose of benchmarking international transactions by using TNMM. The Tribunal held that further sub-division of ITeS was not permissible. The Tribunal followed its decision in Willis Processing Services (I) (P.) Ltd. v. Dy. CIT 30 ITR (Trib)129 (Mumbai) 2014. On appeal by the assessee to the High Court HELD reversing the ITAT:
(i) It is not disputed that voice call services are considered to be the lower-end of ITeS. KPO on the other hand are ITeS where the service providers have to employ advanced level of skills and knowledge. Notification No. SO2810(E) dated 18th September 2013 issued by the CBDT notifying Safe Harbour Rules also indicates the above. Rule 10TA(g) of the said Rules defines KPO Services. Whilst Voice Call Center represents the lower-end of ITeS, KPO represents services involving a higher level of skills and knowledge. India has vast human resources and a large number of highly-skilled technical professionals. The expression "KPO" indicates the involvement of domain knowledge in providing ITeS. Typically, KPO includes involvement of advance skills; the services provided may include analytical services, market research, legal research, engineering and design services, intellectual management etc. On the other hand, Voice Call Centers are normally involved in customer support and processing of routine data. In the case of Maersk Global Centers (India) Pvt. Ltd. v. ACIT (supra) a Special Bench of the Tribunal had referred to a report prepared by National Skill Development Corporation (NSDC) on Human Resource and Skill Requirements in IT and ITES Sector (2022) and noted that the KPO sector has been described as "a value play". The said report also indicates that KPO services are likely to span activities such as "patent advisory, high-end research and analytics, online market research and legal advisory".
(ii) A Knowledge Process is understood as a high value added process chain wherein the processes are dependent on advanced skills, domain knowledge and the experience of the persons carrying on such processes. KPO services are understood as the higher-end of ITeS in terms of value addition.
(iii) While entities rendering Voice Call Center services for customer support and a KPO service provider may be employing IT-based delivery systems, the characteristics of services, the functional aspects, business environment, risks and the quality of human resource employed would be materially different. It plainly follows that benchmarking international transactions on the basis of comparing the PLI of high-end KPO service providers with the PLI of Voice Call Centers would be unreliable and possibly flawed.
(iv) In order to determine the ALP in relation to a controlled transaction, the analysis must include comparables which are similar in all aspects that have a material bearing on their profitability. Paragraph 1.36 of the "OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations" published in 2010 (hereafter 'OECD Guidelines') indicates the "comparability factors" which are important while considering the comparability of uncontrolled transactions/entities with the controlled transactions/entities. Sub-rule (2) of rule 10B of the Income Tax Rules, 1962 also mandates that the comparability of international transactions with uncontrolled transactions would be judged with reference to the factors indicated under clauses (a) to (d) of that sub-rule, which are similar to the comparability factors as indicated under the OECD Guidelines. These include characteristics of property or services transferred and functions performed.
(v) The Tribunal's view that "once a service falls under the category of ITeS, then there is no sub-classification of segment" is difficult to accept as it is contrary to the fundamental rationale of determining ALP by comparing controlled transactions/entities with similar uncontrolled transactions/entities. ITeS encompasses a wide spectrum of services that use Information Technology based delivery. Such services could include rendering highly technical services by qualified technical personnel, involving advanced skills and knowledge, such as engineering, design and support. While, on the other end of the spectrum ITeS would also include voice-based call centers that render routine customer support for their clients. Clearly, characteristics of the service rendered would be dissimilar. Further, both service providers cannot be considered to be functionally similar. Their business environment would be entirely different, the demand and supply for the services would be different, the assets and capital employed would differ, the competence required to operate the two services would be different. Each of the aforesaid factors would have a material bearing on the profitability of the two entities. Treating the said entities to be comparables only for the reason that they use Information Technology for the delivery of their services, would be erroneous.
(vi) Whilst the Tribunal in Willis Processing Services (India) Pvt. Ltd. v. DCIT (supra) held that no distinction could be made between KPO and BPO service providers, however, a contrary view had been taken by several benches of the Tribunal in other cases. In Capital IQ Information System India (P.) Ltd. v. Dy. CIT, (IT) [2013] 32 taxmann.com 21 and Lloyds TSB Global Services Pvt. Ltd. v. DCIT, (ITA No. 5928/Mum/2012 dated 21th November 2012), the Hyderabad and Mumbai Bench of the Tribunal respectively accepted the view that a BPO service provider could not be compared with a KPO service provider.
(vii) The Special Bench of the Tribunal in Maersk Global Centers (India) Pvt. Ltd. struck a different cord. The Special Bench of the Tribunal held that even though there appears to be a difference between BPO and KPO Services, the line of difference is very thin. The Tribunal was of the view that there could be a significant overlap in their activities and it may be difficult to classify services strictly as falling under the category of either a BPO or a KPO. The Tribunal also observed that one of the key success factors of the BPO Industry is its ability to move up the value chain through KPO service offering. For the aforesaid reasons, the Special Bench of the Tribunal held that ITeS Services could not be bifurcated as BPO and KPO Services for the purpose of comparability analysis in the first instance. The Tribunal proceeded to hold that a relatively equal degree of comparability can be achieved by selecting potential comparables on a broad functional analysis at ITeS level and that the comparables so selected could be put to further test by comparing specific functions performed in the international transactions with uncontrolled transactions to attain relatively equal degree
of comparability.
(viii) We have reservations as to the Tribunal's aforesaid view in Maersk Global Centers (India) Pvt. Ltd. (supra). As indicated above, the expression 'BPO' and 'KPO' are, plainly, understood in the sense that whereas, BPO does not necessarily involve advanced skills and knowledge; KPO, on the other hand, would involve employment of advanced skills and knowledge for providing services. Thus, the expression 'KPO' in common parlance is used to indicate an ITeS provider providing a completely different nature of service than any other BPO service provider. A KPO service provider would also be functionally different from other BPO service providers, inasmuch as the responsibilities undertaken, the activities performed, the quality of resources employed would be materially different. In the circumstances, we are unable to agree that broadly ITeS sector can be used for selecting comparables without making a conscious selection as to the quality and nature of the content of services. Rule 10B(2)(a) of the Income Tax Rules, 1962 mandates that the comparability of controlled and uncontrolled transactions be judged with reference to service/product characteristics. This factor cannot be undermined by using a broad classification of ITeS which takes within its fold various types of services with completely different content and value. Thus, where the tested party is not a KPO service provider, an entity rendering KPO services cannot be considered as a comparable for the purposes of Transfer Pricing analysis. The perception that a BPO service provider may have the ability to move up the value chain by offering KPO services cannot be a ground for assessing the transactions relating to services rendered by the BPO service provider by benchmarking it with the transactions of KPO services providers. The object is to ascertain the ALP of the service rendered and not of a service (higher in value chain) that may possibly be rendered subsequently.
(ix) The transfer pricing analysis must serve the broad object of benchmarking an international transaction for determining an ALP. The methodology necessitates that the comparables must be similar in material aspects. The comparability must be judged on factors such as product/service characteristics, functions undertaken, assets used, risks assumed. This is essential to ensure the efficacy of the exercise. There is sufficient flexibility available within the statutory framework to ensure a fair ALP. Applying the aforesaid principles to the facts of the present case, it is clear that both Vishal and eClerx could not be taken as comparables for determining the ALP.
(x) The Assessee had also sought the exclusion of eClerx and Vishal on the ground that both the companies had returned supernormal profits. Whereas the operating margins (operating margin over total cost) in case of Vishal and eClerx were 50.68% and 65.88% respectively, the PLIs of all other comparables were in the range of 2.2% to 24%. In our view, it would not be apposite to exclude comparables only for the reason that their profits are high, as the same is not provided for in the statutory framework. The OECD Guidelines suggest that a quartile method be adopted which excludes entities that fall in the extreme quartiles for comparability. However, neither Chapter X of the Act nor the Rules made by CBDT provide for exclusion for such statistical reason.
(xi) Having stated the same, it may be necessary to bear in mind that supernormal profits may in certain cases indicate a functional dissimilarity or dissimilarity with respect to a feature that has a material bearing on the profitability. In such circumstances, it would be necessary to undertake further analysis to eliminate the possibility of the high profits resulting on account of any material dissimilarity between the tested party and the chosen comparable. A wide deviation in the PLI amongst selected comparables could be indicative that the comparables selected are either materially dissimilar or the data used is not reliable. The Tribunal proceeded on the basis that an adjustment could be made only in cases where supernormal profits resulted from the factors indicated in Rule 10B of the Income Tax Rules, 1962. In our view, the factors mentioned in Rule 10B are not exhaustive. The principal object of benchmarking international transactions against uncontrolled transactions is to impute an ALP to those transactions. This exercise would fail if a factor, which has a material bearing on the value or the profitability, as the case may be, depending on the method used, is ignored.
(xii) The Tribunal proceeded on the basis that while applying TNMM method, broad functionality is sufficient and it is not necessary that further effort be taken to find a comparable entity rendering services of similar characteristics as the tested entity. The DRP held that TNMM allows flexibility and tolerance in selection of comparables, as functional dissimilarities are subsumed at net margin levels, as compared to Resale Price Method or Comparable Uncontrolled Price Method and, therefore, the functional dissimilarities pointed out by the Assessee did not warrant rejection of eClerx and Vishal as comparables. In our view, the aforesaid approach would not be apposite. Insofar as identifying comparable transactions/entities is concerned, the same would not differ irrespective of the transfer pricing method adopted. In other words, the comparable transactions/entities must be selected on the basis of similarity with the controlled transaction/entity. Comparability of controlled and uncontrolled transactions has to be judged, inter alia, with reference to comparability factors as indicated under rule 10B(2) of the Income Tax Rules, 1962. Comparability analysis by TNMM method may be less sensitive to certain dissimilarities between the tested party and the comparables. However, that cannot be the consideration for diluting the standards of selecting comparable transactions/entities. A higher product and functional similarity would strengthen the efficacy of the method in ascertaining a reliable ALP. Therefore, as far as possible, the comparables must be selected keeping in view the comparability factors as specified. Wide deviations in PLI must trigger further investigations/analysis.
(xiii) Consideration for a transaction would reflect the functions performed, the significant activities undertaken, the assets or resources used/consumed, the risks assumed. Thus, comparison of activities undertaken/functions performed is important for determining the comparability between controlled and uncontrolled transactions/entity. It would not be apposite to ignore functional dissimilarity only for the reason that its impact may be reduced on account of using arithmetical mean of the PLI. The DRP had noted that eClerx was functionally dissimilar, but ignored the same relying on an assumption that the functional dissimilarity would be subsumed in the profit margin. As noted, the content of services provided by the Assessee and the entities in question were not similar. In addition, there were also functional dissimilarities between the Assessee and the two entities in question. In our view, these comparability factors could not be ignored by the Tribunal. While using TNMM, the search for comparables may be broadened by including comparables offering services/products which are not entirely similar to the controlled transaction/entity. However, this can be done only if (a) the functions performed by the tested party and the selected comparable entity are similar including the assets used and the risks assumed; and (b) the difference in services/products offered has no material bearing on the profitability.

Related Judgements

  1. Maersk Global Centres (India) Pvt. Ltd vs. ACIT (ITAT Mumbai Special Bench) 
    Transfer Pricing: Companies in ITES cannot be classified into low-end BPO services and high-end KPO services for comparability analysis but have to be classified based on the functions performed. Comparables with abnormal profit margins cannot be discarded per se but must be examined to determine whether the high margins…
  2. Vodafone India Services Pvt. Ltd vs. DCIT (ITAT Mumbai) 
    The argument that the ITES/BPO industry has several segments starting from low end segment such 'call centre', 'customer care' to high end segments such as 'KPO', 'content development' etc. in which there is wide variation in the billing rates and that high end services are not comparable to the…
  3. DCIT vs. BP India Services Pvt Ltd (ITAT Mumbai) 
    Under Rule 10B(1)(e)(ii), "the net profit margin realised by the enterprise or by an unrelated enterprise from a comparable uncontrolled transaction or a number of such transaction is computed having regard to the same base;" The term "uncontrolled transaction" is defined in Rule 10A(a) to mean "a transaction between…
  4. Lummus Technology Heat Transfer BV vs. DCIT (ITAT Delhi) 
    Transfer Pricing: Unaudited segmental accounts can be relied upon for comparing profitability of controlled transactions with uncontrolled transactions. While size is relevant in entity level comparison, it is not relevant in transaction level comparison within the same entity
    (i) In applying the Transactional Net Margin Method (TNMM) under Rule…
  5. Patni Telecom Solutions Pvt. Ltd vs. ACIT (ITAT Hyderabad) 
    Though in Capgemini it was held that the concept of economy of scale is relevant only for manufacturing concerns, which have high fixed assets, and not for service concerns and that the turnover filter cannot be applied to exclude companies with an extremely large turnover from comparison, a contrary…

Rampgreen Solutions Pvt. Ltd vs. CIT (Delhi High Court)

by editor
We have reservations as to the Tribunal's aforesaid view in Maersk Global Centers (India) Pvt. Ltd. (supra). As indicated above, the expression 'BPO' and 'KPO' are, plainly, understood in the sense that whereas, BPO does not necessarily involve advanced skills and knowledge; KPO, on the other hand, would involve employment of advanced skills and knowledge for providing services. Thus, the expression 'KPO' in common parlance is used to indicate an ITeS provider providing a completely different nature of service than any other BPO service provider. A KPO service provider would also be functionally different from other BPO service providers, inasmuch as the responsibilities undertaken, the activities performed, the quality of resources employed would be materially different. In the circumstances, we are unable to agree that broadly ITeS sector can be used for selecting comparables without making a conscious selection as to the quality and nature of the content of services

CIT vs. Executive Engineer, GESCOM (Karnataka High Court)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: August 18, 2015 (Date of pronouncement)
DATE: August 26, 2015 (Date of publication)
AY: -
FILE: Click here to download the file in pdf format
CITATION:
S. 194C/ 194J TDS: Even if the supply contract is an integral part of a composite contract on single sale responsible basis, there is no obligation to deduct TDS. Service contracts, not being professional services, are not covered by s. 194J
(i) The clauses of the contract make it clear that three separate contracts have been entered into, but all the separate contracts were integral parts of a composite contract on single sale responsible basis. The invoices raised on the basis of the said composite contract separately mentioning the value of the material supplied, no deduction is permissible under Section 194C of the Act. Section 194C of the Act cannot be pressed into service to deduct tax at source. The whole object of introduction of that Section is to deduct tax in respect of payments made for works contract. No division is, therefore, permissible in respect of a contract for supply of materials for carrying out the work. It is in a case of distinct contracts. The contract for supply of material being a separate and distinct contract, no division is permissible under Section 194C of the Act. Section 194C has suffered an amendment also with effect from October 1, 2009 and the provision has been made very clear without any ambiguity.
(ii) Thus, we can conclude safely that if a person executing the work, purchases the materials from a person other than the customer, the same would not fall within the definition of 'work' under Section 194C of the Act.
(iii) As regards the issue whether the provisions of Section 194J or Section 194C would apply in respect of payments made by an assessee towards Bill Management Services, the services rendered by the agencies engaged by the assessees at Hospet, Bellary and Raichur are not professional services, and, therefore, Section 194J is not attracted. The demand towards the alleged short deduction of tax deducted at source and interest, therefore, was improper. The contract was rightly held to be a service contract by the Tribunal which should be covered under Section 194C of the Act.

Related Judgements

  1. CIT vs. Glenmark Pharmaceuticals (Bombay High Court) 
    The argument of the Revenue that the restrictions imposed on the manufacturer to (a) utilise the formula provided by the assessee, (b) affix the trade-mark of the assessee, (c) manufacture as per specifications provided by the assessee and (iii) deal exclusively with the assessee show that the contract is…
  2. Medi Assist TPA vs. DCIT (Karnataka High Court) 
    The assessee, a Third party Administrator ("TPA") licensed by IRDA, engaged in providing "cashless" health insurance claim services is required to deduct tax at source under section 194J of the Act when making payment to hospitals out of funds provided by the insurance company. Read more ›
  3. CIT vs. PVS Memorial Hospital Ltd (Kerala High Court) 
    The expression "tax deductible at source under Chapter XVII-B" occurring in Section 40(a)(ia) has to be understood as tax deductible at source under the appropriate provision of Chapter XVII-B. Therefore, as in this case, if tax is deductible under Section 194J but is deducted under Section 194C, such a…
  4. Jindal Thermal Power vs. DCIT (Karnataka High Court) 
    In Ishikawakima-Harima it was held that fees for technical services was not assessable to tax u/s 9(1)(vii) if the twin conditions of it being rendered in India and utilized in India were not satified. The amendment to s. 9 (1) suggests that the criterion of residence, place of business…
  5. CIT vs. Silver Oak Laboratories P. Ltd (Supreme Court) 
    On examining the terms and conditions, invoices, purchase orders and challans indicating payment of excise duty, there is no material on record to indicate that the transaction in question is a "contract for carrying out works". Hence, s. 194C is not attracted. S. 194C has been amended by the…

CIT vs. Executive Engineer, GESCOM (Karnataka High Court)

by editor
The whole object of introduction of that Section is to deduct tax in respect of payments made for works contract. No division is, therefore, permissible in respect of a contract for supply of materials for carrying out the work. It is in a case of distinct contracts. The contract for supply of material being a separate and distinct contract, no division is permissible under Section 194C of the Act

Pr. CIT vs. Tupperware India Pvt. Ltd (Delhi High Court)

COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS:
COUNSEL:
DATE: August 10, 2015 (Date of pronouncement)
DATE: August 26, 2015 (Date of publication)
AY: 2003-04
FILE: Click here to download the file in pdf format
CITATION:
S. 147: Failure by AO to comply with the law in G. K. N. Driveshafts & pass order on objections renders assessment order void; Even a s. 143(1) assessment cannot be reopened in the absence of new/ tangible material
(i) The Court is of the considered view that after having correctly understood the decision of the Supreme Court in G.K.N. Driveshafts (India) Ltd. v. ITO (2003) 259 ITR 19 (SC) as mandatorily requiring the AO to comply with the procedure laid down therein and to dispose of the objections to the reopening order with a speaking order, the CIT (A) committed an error in not quashing the reopening order and the consequent assessment;
(ii) Though only an assessment u/s 143(1) and not 143(3) was made, the reopening order of the AO only refers to the report of Statutory Auditor under Section 44AB of the Act which report was already enclosed with the return filed by the Assessee. Therefore, factually, there was no new material that the AO came across so as to have "reasons to believe that the income had escaped assessment".
(iii) The department's contention that the judgement in CIT vs. Orient Craft Ltd. (2013) 354 ITR 536 (Del) is contrary to the Full Bench verdict in CIT-VI v. Usha International Ltd. (2012) 348 ITR 485 and the issue should be referred to a larger Bench is not acceptable because the central issue examined in the decision of the Full Bench in Usha International Ltd. was as to what constituted a "change of opinion". The Court, therefore, does not consider the decision in Orient Craft Ltd. as being contrary to the decision in Usha International Ltd. In other words, there is no occasion for the Court to refer to a larger bench the question of the correctness of the decision in Orient Craft Ltd. which decision squarely applies to the facts of the present case. (Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers P. Ltd. (2007) 291 ITR 500 & Madhukar Khosla v. Assistant Commissioner of Income Tax (2013) 354 ITR 356 referred).

Related Judgements

  1. Madhukar Khosla vs. ACIT (Delhi High Court) 
    S. 147: If "reasons to believe" are not based on new, "tangible materials", the reopening amounts to an impermissible review
    (ii) The foundation of the AO's jurisdiction and the raison d'etre of a reassessment notice are the "reasons to believe". Now this should have a relation or a…
  2. Mohan Gupta (HUF) vs. CIT (Delhi High Court) 
    S. 147: Even s. 143(1) Intimation cannot be reopened in the absence of new information
    The reassessment is not on the basis of new information or facts that have come to the fore now, but rather, a re-appreciation or review of the facts that were provided along with…
  3. Gujarat Power Corporation Ltd vs. ACIT (Gujarat High Court) 
    The assessee's argument that as the Full Bench judgement in Kelivinator 256 ITR 1 (Del) (FB) was approved by the Supreme Court 320 ITR 561, the observations made by the Full Bench must be regarded as the ratio of the Supreme Court is not correct because the question before…
  4. CIT vs. Orient Craft Ltd (Delhi High Court) 
    S. 147 permits an assessment to be reopened if there is "reason to believe". It makes no distinction between an order u/s 143(3) or an Intimation u/s 143(1). Accordingly, it is not permissible to adopt different standards while interpreting the words "reason to believe" vis-à-vis s. 143(1) and s….
  5. CIT vs. Usha International Ltd (Delhi High Court) 
    A case where the AO specifically examines an issue and applies his mind poses no difficulty because even if the order is silent, it is a case of "change of opinion". However, in a case where the AO does not notice or examine a particular aspect in the assessment…

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Pr. CIT vs. Tupperware India Pvt. Ltd (Delhi High Court)

by editor
The department's contention that the judgement in CIT vs. Orient Craft Ltd. (2013) 354 ITR 536 (Del) is contrary to the Full Bench verdict in CIT-VI v. Usha International Ltd. (2012) 348 ITR 485 and the issue should be referred to a larger Bench is not acceptable because the central issue examined in the decision of the Full Bench in Usha International Ltd. was as to what constituted a "change of opinion". The Court, therefore, does not consider the decision in Orient Craft Ltd. as being contrary to the decision in Usha International Ltd. In other words, there is no occasion for the Court to refer to a larger bench the question of the correctness of the decision in Orient Craft Ltd. which decision squarely applies to the facts of the present case

CIT vs. Suman Dhamija (Supreme Court)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: July 1, 2015 (Date of pronouncement)
DATE: August 26, 2015 (Date of publication)
AY: -
FILE: Click here to download the file in pdf format
CITATION:
CBDT Instruction No. 3/2011 dated 9.2.2011 specifying monetary limits for filing appeals by the department applies only to appeals filed after that date and not to pending appeals
The Supreme Court had to consider whether Instruction No. 3/2011 dated 9.2.2011 issued by the Central Board of Direct Taxes setting out limits for filing appeals to the ITAT and the High Courts applied even to appeals filed before the date of the Instruction. The High Court dismissed the appeals of the Department on the ground that the said Instruction applied even to appeals filed before that date. On appeal by the department to the Supreme Court HELD reversing the High Court:
The appeals and review petitions preferred by the department before the High Court, were disposed of on the basis of the instructions issued by the Central Board of Direct Taxes dated 9.2.2011. It is not a matter of dispute, that all the appeals were preferred prior to 2011, whereas, the instructions dated 9.2.2011 clearly indicate in paragraph 11 thereof, that they shall not govern cases which have been filed before 2011, and that, the same will govern only such cases which are filed after the issuance of the aforesaid instructions dated 9.2.2011. In view of the above, the instant appeals are allowed, the impugned orders passed by the High Court hereby set aside. The matters are remitted back to the High Court for re-adjudication of the appeals on merits, in accordance with law.
Note: This reverses the judgements in Madhukar K. Inamdar 318 ITR 149 (Bom), Pithwa Engineering 276 ITR 519 (Bom) & Ashok Patel 317 ITR 386 (MP) CIT Vs. Varsha Dilip Kolhe (2013) 350 ITR 248 but affirms CIT vs. Shambhubhai Mahadev Ahir and CIT vs. M/s Varindera Construction Co (P&H High Court – Full Bench)(Gujarat High Court – Full Bench) and CBDT Circular That Monetary Limits For Filing Appeals Are Applicable Prospectively

Related Judgements

  1. CIT vs. Shambhubhai Mahadev Ahir (Gujarat High Court – Full Bench) 
    CBDT's low tax effect circulars have prospective effect
    Clause 11 of Instruction No. 3/2011 dated 9.2.2011 specifically states that "this instruction will apply to appeals filed on or after 9.02.2011. However, the cases where appeals have been filed before 9.02.2011 will be governed by the instructions on…
  2. CIT vs. Shambhubhai Mahadev Ahir (Gujarat High Court) 
    Though in Sureshchandra Durgaprasad Khatod (HUF) (and other judgements), it has been held that Instruction No. 3 of 2011 dated 9.2.2011 shall apply to pending appeals paragraph 11 of the Instruction itself provides that "This instructions will apply to appeals filed on or after 9th February 2011. However, the…
  3. CIT vs. Virgo Marketing Pvt. Ltd (Supreme Court) 
    In view of Para 11 of CBDT Instruction No.3/2011 dated 9th February, 2011, liberty is granted to the Department to move the High Court by way of review within four weeks.Read more ›
  4. CIT vs. Virendra & Co (Bombay High Court) 
    S. 268A was inserted by the Finance Act 2008 w.r.e.f. 1.4.1999 to reduce litigation in small cases and regulate the right of Revenue to file or not to file appeal. Instruction no.3/2011 dated 9.2.2011 has been issued by the CBDT pursuant to this power. Though clause 11 provides that…
  5. CIT vs. M/s Varindera Construction Co (P&H High Court – Full Bench) 
    Circular dated 15.5.2008 laying down monetary limit controls the filing of the appeals and not their hearing. Appeals filed as per applicable limit at the time of filing cannot be governed by circular applicable at the time of hearing. The object of the Circular u/s 268A is only to…

CIT vs. Suman Dhamija (Supreme Court)

by editor
The Supreme Court had to consider whether Instruction No. 3/2011 dated 9.2.2011 issued by the Central Board of Direct Taxes setting out limits for filing appeals to the ITAT and the High Courts applied even to appeals filed before the date of the Instruction. The High Court dismissed the appeals of the Department on the […]

Cabinet approves arbitration law amendments for expeditious case disposal, cost-effective arbitration

Union Cabinet approves amendments to arbitration law, with an aim to ensure neutrality of arbitrators, expeditious disposal of cases, making arbitration more user friendly & cost effective; Amendments include disqualification of arbitrator if he has any relationship or interest in the matter, insertion of a provision for fast track procedure for conducting arbitration; Also includes amendment to Section 34 relating to grounds for challenge of an arbitral award, to restrict the term "Public Policy of India" (as a ground for challenging the award) by explaining that only where making of award was induced or affected by fraud or corruption, or it is in contravention with the fundamental policy of Indian Law or is in conflict with the most basic notions of morality or justice, the award shall be treated as against Public Policy of India; Amendments seek insertion of a new provision that Arbitral Tribunal shall make its award within a period of 12 months and if the award is made within a period of six months, arbitrator may get additional fees if the parties so agree; New provision inserted to provide that application to challenge the award is to be disposed of by the Court within 1 year, thereby ensuring speedy disposal of cases; New Section 31A to be added for providing comprehensive provisions for costs regime, applicable both to arbitrators as well as related litigation in Court, thatwill avoid frivolous and meritless litigation/arbitration; Amendments also empower Arbitral tribunal to grant all kinds of interim measures which the Court is empowered to grant : Govt. Press Release





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