DIT v. Morgan Stanley & Co.

292 ITR 416Supreme Court of India2007#210 most cited

What is DIT v. Morgan Stanley & Co. authority for?

A Permanent Establishment (PE) signifies a foreign enterprise's virtual projection into another country, with a fixed place PE existing where an MNE's business is wholly or partly carried on. A dependent agent PE requires the agent to act as such and/or have the authority to conclude contracts for the foreign enterprise under DTAA provisions.

360

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2011 to 2026.

Also referred to as

DIT v. Morgan Stanley & Co. · Morgan Stanley PE · 292 ITR 416 · Permanent Establishment DTAA · fixed place PE · dependent agent PE · Article 5 India-USA DTAA · authority to conclude contracts PE · outsourcing MNE · service PE · agency PE

Sections most often in play

Section 143(3)Section 234BSection 144C(13)Section 234ASection 270ASection 9(1)(vi)Section 271(1)(c)Section 5
Read the full judgment

Issues it is cited on

dependent agent peinstallation peagency peservice pefixed place peuse of equipmentprofit split methodsection 44dfunctional analysisfar analysismake available clausesection 44bb

Judgments citing DIT v. Morgan Stanley & Co.

DDIT (I.T) 2(1), Mumbai vs. M/S. Reuters Ltd., Mumbai

Appeals are disposed off

ITA 5228/MUM/2004[2000-2001]Status: DisposedITAT Mumbai28 Jun 2023AY 2000-2001

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

…he judgment, if the correct arm's length price is applied and paid then nothing further would be left to be taxed in the hands of the Foreign Enterprise. 13. Considering the above principle as may be discerned from the judgment in DIT (International Taxation) 292 ITR 416 (supra) it would be clear that— (1) Considering the CBDT Circular No. 742 it would be fair and reasonable that the taxable income is computed at 10 per cent of the gross profits. In the instant case insofar as marketing services are concerned by the arm's length principle what has been paid is more than 10 per cent as can be seen from the order o…

Refinitiv Ltd., Mumbai vs. DDIT (I.Taxation) Range 2, Mumbai

Appeals are disposed off

ITA 5092/MUM/2004[2000-01]Status: DisposedITAT Mumbai28 Jun 2023AY 2000-01

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

…he judgment, if the correct arm's length price is applied and paid then nothing further would be left to be taxed in the hands of the Foreign Enterprise. 13. Considering the above principle as may be discerned from the judgment in DIT (International Taxation) 292 ITR 416 (supra) it would be clear that— (1) Considering the CBDT Circular No. 742 it would be fair and reasonable that the taxable income is computed at 10 per cent of the gross profits. In the instant case insofar as marketing services are concerned by the arm's length principle what has been paid is more than 10 per cent as can be seen from the order o…

Micro Focus Software Inc. (Formerly Known As Novell Inc.), Mumbai vs. The Dy CIT (Intl. Taxation)-Circle-3(2)(2), Mumbai

In the result, the appeal by the assessee is partly allowed for statistical purposes

ITA 891/MUM/2023[2020-21]Status: DisposedITAT Mumbai14 Jun 2023AY 2020-21

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Shri Ketan VedFor Respondent: Shri Soumendu Kumar Dash
Section 143(3)Section 144C(13)Section 144C(5)

…he judgment, if the correct arm's length price is applied and paid then nothing further would be left to be taxed in the hands of the Foreign Enterprise. 13. Considering the above principle as may be discerned from the judgment in DIT (International Taxation) 292 ITR 416 (supra) it would be clear that— (1) Considering the CBDT Circular No. 742 it would be fair and reasonable that the taxable income is computed at 10 per cent of the gross profits. In the instant case insofar as marketing services are concerned by the arm's length principle what has been paid is more than 10 per cent as can be seen from the order o…

Micro Focus Software Inc. (Earlier Known As Novell Inc.), Mumbai vs. The Dy CIT (Intl. Taxation)-Circle-3(2)(2), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 2425/MUM/2022[2018-19]Status: DisposedITAT Mumbai02 May 2023AY 2018-19

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 144C(5)

…at the matter should be sent back to the assessment stage for detailed findings in this regard. In a written note filed by the learned Departmental Representative, it has been submitted that, " it is humbly submitted that in the case of DIT v. Morgan Stanley (292 ITR 416 (SC) The Hon'ble Apex Court in para 32 of its order (page 124 of PB II) has carved out an exception. It has held that 'The situation would be different if transfer pricing analysis does not adequately reflect the functions performed and the risks assumed by the enterprise. In such a situation, there would be a need to attribute profits to the PE…

Micro Focus Software Inc. (Earlier Known As Novell Inc.), Mumbai vs. The Dy CIT (Intl. Taxation)-Circle-3(2)(2), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 2424/MUM/2022[2019-20]Status: DisposedITAT Mumbai02 May 2023AY 2019-20

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 144C(5)

…at the matter should be sent back to the assessment stage for detailed findings in this regard. In a written note filed by the learned Departmental Representative, it has been submitted that, " it is humbly submitted that in the case of DIT v. Morgan Stanley (292 ITR 416 (SC) The Hon'ble Apex Court in para 32 of its order (page 124 of PB II) has carved out an exception. It has held that 'The situation would be different if transfer pricing analysis does not adequately reflect the functions performed and the risks assumed by the enterprise. In such a situation, there would be a need to attribute profits to the PE…

Uk Grid Solution Ltd, United Kingdom vs. DCIT, Circle-3(1)(1), International Taxation, New Delhi

The appeal is allowed

ITA 2088/DEL/2022[2019-20]Status: DisposedITAT Delhi17 Apr 2023AY 2019-20

Bench: Sh. N.K.Billaiya & Sh.Anubhav Sharmaita No. 2088/Del/2022, A.Y. 2019-20 Uk Grid Solution Limited Vs. Deputy Commissioner Of St. Loeonards Building, Harry Income Tax Kerr Drive, Circle- 3(1)(1), Stafford, St16 1Wt, International Taxation United Kingdom New Delhi Pan : Aaica6271A

Section 143(3)Section 90(2)

…ung Heavy Industries Co Ltd: 426 ITR 1 (SC), DIT vs Mitsui & Co Ltd: 399 ITR 505 (Del) and AB SciexPte Ltd vs ACIT: 195 ITD 384 (Del Trib.) 9.8.6 As with regard to principles of attribution to business connection/ PE he relied DIT vs Morgan Stanley & Co Inc: 292 ITR 416 (SC), DIT vs Morgan Stanley & Co Inc: 292 ITR 416 (SC), The Anglo French Textile Co Ltd vs CIT: 25 ITR 27 (SC), Annamalais Timber Trust and Co vs CIT: 41 ITR 781 (Mad), CIT vsBertrams Scotts Ltd: 31 Taxman 444 (Cal), CIT vs Hyundai Heavy Industries Co Ltd: 291 ITR 482 (SC), Samsung Heavy Industries Co Ltd vs DIT: 265 CTR 109 (Uttarakhand), Affirm…

Uk Grid Solution Ltd, United Kingdom vs. DCIT, Circle-3(1)(1), International Taxation, New Delhi

The appeal is allowed

ITA 2087/DEL/2022[2018-2019]Status: DisposedITAT Delhi12 Apr 2023AY 2018-2019

Bench: Sh. N.K.Billaiya & Sh.Anubhav Sharmaita No. 2087/Del/2022, A.Y. 2018-19 Uk Grid Solution Limited Vs. Deputy Commissioner Of St. Loeonards Building, Harry Income Tax Kerr Drive, Circle- 3(1)(1), Stafford, St16 1Wt, International Taxation United Kingdom New Delhi Pan : Aaica6271A

Section 143(3)Section 9Section 90(2)

…ung Heavy Industries Co Ltd: 426 ITR 1 (SC), DIT vs Mitsui & Co Ltd: 399 ITR 505 (Del) and AB SciexPte Ltd vs ACIT: 195 ITD 384 (Del Trib.) 9.8.6 As with regard to principles of attribution to business connection/ PE he relied DIT vs Morgan Stanley & Co Inc: 292 ITR 416 (SC), DIT vs Morgan Stanley & Co Inc: 292 ITR 416 (SC), The Anglo French Textile Co Ltd vs CIT: 25 ITR 27 (SC), Annamalais Timber Trust and Co vs CIT: 41 ITR 781 (Mad), CIT vsBertrams Scotts Ltd: 31 Taxman 444 (Cal), CIT vs Hyundai Heavy Industries Co Ltd: 291 ITR 482 (SC), Samsung Heavy Industries Co Ltd vs DIT: 265 CTR 109 (Uttarakhand), Affirm…

Taj Tv Ltd., Mumbai vs. Dy CIT (International Taxation)-4(1)(2), Mumbai

ITA 821/MUM/2021[2017-18]Status: DisposedITAT Mumbai31 Mar 2023AY 2017-18

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Taj Tv Limited Dcit (International C/O. Suresh Surana & Taxation)-4(1)(2) Associates Llp Air India Building, 8Th Floor, Bakhtawar, Vs. Nariman Point, Nariman Point, Mumbai-400 Mumbai-400 021 020 (Appellant) (Respondent) Pan No. Aabct6542J Reference Of Orders / Directions In Appeal Sr Orders & Directions Passed By Date No 1 Draft Assessment Order U/S The Deputy 27/12/2019 144C Of The Act Commissioner Of Income Tax , International Taxation, Circle 4 (1) (2), Mumbai 2 Direction U/S 144C (5) Of The Cit (Drp-2) , 22/03/2021 Act Mumbai - 2 3 Assessment Order U/S 143 93) The Deputy 12/04/2021 R.W.S 144C (13) Of The Act Commissioner Of Income Tax , International Taxation, Circle 4 (1) (2), Mumbai

For Appellant: Shri P.J. Pardiwala Sr AdvFor Respondent: Shri G.C. Srivastava, Adv
Section 143Section 144C

…profits can be attributed to the source state. Thereafter, she referred to the methodology of computation of the profit attributable. She further rejected the reliance by the assessee on the decision of the Honourable Supreme Court in case of Morgan Stanley [292 ITR 416] holding that reliance shall be applicable only when arm‟s-length price has been determined for all the functions and risks carried out by the dependent agent which is not the case of the assessee. Thus, she rejected claim of the assessee that if the payment to the agent is made at arm‟s-length, then non-resident is not liable to tax. The reasons…

Maruti Suzuki India Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeal of the Revenue in ITA No

ITA 961/DEL/2015[2010-11]Status: DisposedITAT Delhi09 Feb 2023AY 2010-11

Bench: Shri Shamim Yahya & Shri Kul Bharat[Assessment Year : 2010-11] Maruti Suzuki India Ltd., Vs Dcit, Plot No.1, Nelson Mandela Road, Circle-16(1), Vasant Kunj, New Delhi-110070. New Delhi. Pan-Aaacm0829Q Appellant Respondent [Assessment Year : 2010-11] Dcit, Vs Maruti Suzuki India Ltd., Circle-16(1), Plot No.1, Nelson Mandela Road, New Delhi. Vasant Kunj, New Delhi-110070. Pan-Aaacm0829Q Appellant Respondent Appellant By Shri Ajay Vohra, Sr.Adv., Shri Neeraj Jain, Adv. & Ms. Tejasvi Jain & Ms. Somya Jain, Ca Respondent By Shri G.C.Srivastava, Adv., Shri Kalrav Mehrotra, Adv. & Shri Mayank Patawari, Ca Date Of Hearing 11.11.2022 Date Of Pronouncement 09.02.2023

Section 143(3)Section 144CSection 144C(5)Section 43Section 43B

…vs Ahmedbhai Umarbhai & Co. 18 ITR 472 (SC). He placed reliance on the judgement of Hon’ble Supreme Court in the case of Anglo-French Textile Co. Ltd. vs CIT 25 ITR 27 (SC) and the judgement of Hon’ble Supreme Court in the case of DIT vs Morgan Stanley & Co. 292 ITR 416 (SC). 93. To buttress the contention that the AO has on adhoc and arbitrary basis assumed that the profit of SMC at 20% of sales to the appellant on conjectures and surmises attributed 50% of the same to the alleged PE of the appellant in India. He further submitted that in the case of DIT vs Morgan Stanley & Co. (supra), the Hon’ble Supreme Cou…

DCIT, New Delhi vs. M/S. Maruti Suzuki India Ltd., New Delhi

In the result, the appeal of the Revenue in ITA No

ITA 1507/DEL/2015[2010-11]Status: DisposedITAT Delhi09 Feb 2023AY 2010-11

Bench: Shri Shamim Yahya & Shri Kul Bharat[Assessment Year : 2010-11] Maruti Suzuki India Ltd., Vs Dcit, Plot No.1, Nelson Mandela Road, Circle-16(1), Vasant Kunj, New Delhi-110070. New Delhi. Pan-Aaacm0829Q Appellant Respondent [Assessment Year : 2010-11] Dcit, Vs Maruti Suzuki India Ltd., Circle-16(1), Plot No.1, Nelson Mandela Road, New Delhi. Vasant Kunj, New Delhi-110070. Pan-Aaacm0829Q Appellant Respondent Appellant By Shri Ajay Vohra, Sr.Adv., Shri Neeraj Jain, Adv. & Ms. Tejasvi Jain & Ms. Somya Jain, Ca Respondent By Shri G.C.Srivastava, Adv., Shri Kalrav Mehrotra, Adv. & Shri Mayank Patawari, Ca Date Of Hearing 11.11.2022 Date Of Pronouncement 09.02.2023

Section 143(3)Section 144CSection 144C(5)Section 43Section 43B

…vs Ahmedbhai Umarbhai & Co. 18 ITR 472 (SC). He placed reliance on the judgement of Hon’ble Supreme Court in the case of Anglo-French Textile Co. Ltd. vs CIT 25 ITR 27 (SC) and the judgement of Hon’ble Supreme Court in the case of DIT vs Morgan Stanley & Co. 292 ITR 416 (SC). 93. To buttress the contention that the AO has on adhoc and arbitrary basis assumed that the profit of SMC at 20% of sales to the appellant on conjectures and surmises attributed 50% of the same to the alleged PE of the appellant in India. He further submitted that in the case of DIT vs Morgan Stanley & Co. (supra), the Hon’ble Supreme Cou…

Ups Asia Group Pte Ltd, Mumbai vs. Assistant C0Mmissioner of Income Tax (Int Tax)-4(3)(1), Mumbai

In the result, the appeals of the assesse are dismissed

ITA 2244/MUM/2022[2019-20]Status: DisposedITAT Mumbai24 Jan 2023AY 2019-20

Bench: Shri Aby T Varkey & Shri Amarjit Singh

For Appellant: Nitesh JoshiFor Respondent: Soumendu Kumar Dash
Section 143(3)Section 9(1)Section 9(1)(i)

…he judgment, if the correct arm's length price is applied and paid then nothing further would be left to be taxed in the hands of the Foreign Enterprise. 13. Considering the above principle as may be discerned from the judgment in DIT (International Taxation) 292 ITR 416 (supra) it would be clear that— (1) Considering the CBDT Circular No. 742 it would be fair and reasonable that the taxable income is computed at 10 per cent of the gross profits. In the instant case insofar as marketing services are concerned by the arm's length principle what has been paid is more than 10 per cent as can be seen from the order o…

Ups Asia Group Pte Ltd, Mumbai vs. Assistant Commissioner of Income Tax(Intrnational Taxation)-4(3)(1), Mumbai

In the result, the appeals of the assesse are dismissed

ITA 2243/MUM/2022[2018-19]Status: DisposedITAT Mumbai24 Jan 2023AY 2018-19

Bench: Shri Aby T Varkey & Shri Amarjit Singh

For Appellant: Nitesh JoshiFor Respondent: Soumendu Kumar Dash
Section 143(3)Section 9(1)Section 9(1)(i)

…he judgment, if the correct arm's length price is applied and paid then nothing further would be left to be taxed in the hands of the Foreign Enterprise. 13. Considering the above principle as may be discerned from the judgment in DIT (International Taxation) 292 ITR 416 (supra) it would be clear that— (1) Considering the CBDT Circular No. 742 it would be fair and reasonable that the taxable income is computed at 10 per cent of the gross profits. In the instant case insofar as marketing services are concerned by the arm's length principle what has been paid is more than 10 per cent as can be seen from the order o…

Mfe Formwork Technology Sdn Bhd, Mumbai vs. The CIT (Intl Tax), Mumbai

In the result, the appeal is allowed

ITA 1579/MUM/2022[2018-19]Status: DisposedITAT Mumbai24 Jan 2023AY 2018-19

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri.P.J.Pardiwala/HarshFor Respondent: Ms. Surabhi Sharma-CIT DR
Section 143(3)Section 263

…circumstances of the case and in law, the CIT erred by not considering that since the PE in India was remunerated at arm‟s length price no further attribution of income is warranted as per decision of Hon‟ble Supreme Court in the case of Morgan Stanley & Co. 292 ITR 416 (SC) and thus the original assessment order of the Assessing Officer is not erroneous and prejudicial to interest of revenue. The Appellant prays that the order dated 7 June 2022 passed under section 263 of the Act, by the CIT be struck down as invalid, null and void ab initio.” ITA No. 1578 & 1579/MUM/2022 MFE Formwork Technology SDN BHD.;A.Y.…

Mfe Formwork Technology Sdn Bhd, Mumbai vs. The CIT (Intl Tax), Mumbai

In the result, the appeal is allowed

ITA 1578/MUM/2022[2019-20]Status: DisposedITAT Mumbai24 Jan 2023AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri.P.J.Pardiwala/HarshFor Respondent: Ms. Surabhi Sharma-CIT DR
Section 143(3)Section 263

…circumstances of the case and in law, the CIT erred by not considering that since the PE in India was remunerated at arm‟s length price no further attribution of income is warranted as per decision of Hon‟ble Supreme Court in the case of Morgan Stanley & Co. 292 ITR 416 (SC) and thus the original assessment order of the Assessing Officer is not erroneous and prejudicial to interest of revenue. The Appellant prays that the order dated 7 June 2022 passed under section 263 of the Act, by the CIT be struck down as invalid, null and void ab initio.” ITA No. 1578 & 1579/MUM/2022 MFE Formwork Technology SDN BHD.;A.Y.…

Morgan Stanley International Incorporated, Mumbai vs. D.D.I.T. (I.T.) 4(1), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 5985/MUM/2012[2007-08]Status: DisposedITAT Mumbai13 Jan 2023AY 2007-08

Bench: Shri Vikas Awasthy & Shri Gagan Goyalmorgan Stanley International Incorporated C/O Bsr & Co., Chartered Accountants, Lodha Excelus, 1St Floor, Apollo Mills Compound, N.M. Joshi Marg, Mumbai - 400011. Pan: Aaecm1492R ...... Appellant Vs. Ddit (International Taxation)-4(1), Room No. 133, 1St Floor, Scindia House, Ballard Estate, Mumbai - 400038. ..... Respondent Appellant By : Sh. Sunil Moti Lala Respondent By : Sh. Soumendu Kumar Dash, Sr. Dr Date Of Hearing : 24/11/2022 Date Of Pronouncement : 13/01/2023

For Appellant: Sh. Sunil Moti lalaFor Respondent: Sh. Soumendu Kumar Dash, Sr. DR
Section 143(3)Section 9(1)(vii)

…reaty. Regarding the issue, whether overseas entity through their seconded employees have constituted Service PE in India, the Hon’ble High Court has referred and relied upon the decision of the Hon’ble Supreme Court in the case of Morgan Stanley & Co. (2007) 292 ITR 416 (SC) and also examined the terms and condition of the employment of seconded employees, whether they are employees of overseas entity or of Centrica India. The Hon’ble High Court came to the conclusion that the overseas entities were not only legal employer but also real employer of the seconded employees to India. After referring to the relevant…

DCIT, Circle- 1(2)(1), International Taxation, New Delhi vs. Convergys Customer Management Group Inc., New Delhi

In the result, assessee’s appeal is partly allowed, whereas,

ITA 7782/DEL/2018[2014-15]Status: DisposedITAT Delhi11 Jan 2023AY 2014-15

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2014-15

Section 9(1)(vi)

…ndia and are not linked to the PE of the assessee in India. C. The attribution of profits to the PE should be made by the transfer pricing principles supported by the CBDT Circular No. 5 of 2004 as well as the judgment of the Supreme Court in Morgan Stanley (292 ITR 416). As per the Supreme Court in the case of Morgan Stanley, it has been held as under: “The impugned ruling is correct in principle insofar as an associated enterprise, that also constitutes a PE, has been remunerated on an arm’s length basis taking into account all the risk-taking functions of the enterprise. In such cases nothing further would.…

M/S. Krones Aktiengesellschaft, New Delhi vs. DCIT (International Taxation), New Delhi

In the result, the appeal of the assessee in ITA No

ITA 907/DEL/2017[2011-12]Status: DisposedITAT Delhi30 Dec 2022AY 2011-12

Bench: Shri N.K. Billaiya & Shri Yogesh Kumar

For Appellant: Shri Percy Pardiwalla, Sr AdvFor Respondent: Shri Sanjay Kumar, Sr.DR
Section 143(3)

…KIPL as DAPE of the assessee and further, since KIPL has been remunerated by the assessee for commission activities on arm’s length basis, no further attribution is required in lieu of law laid down by the Hon'ble Supreme Court in the case of Morgan Stanley 292 ITR 416. 33. We, accordingly, hold that pursuant to the specific exclusion of independent agent under Article 5(5) of the DTAA, the case o the assessee falls outside the scope of PE. We, accordingly, direct the Assessing Officer to delete the impugned addition. 34. Appeal of the assessee is allowed. ITA No. 2617/DEL/2017 [Revenue’s appeal] 35. The onl…

DCIT (International Taxation), New Delhi vs. M/S. Krones Aktiengesellschaft, New Delhi

In the result, the appeal of the assessee in ITA No

ITA 2617/DEL/2017[2011-12]Status: DisposedITAT Delhi30 Dec 2022AY 2011-12

Bench: Shri N.K. Billaiya & Shri Yogesh Kumar

For Appellant: Shri Percy Pardiwalla, Sr AdvFor Respondent: Shri Sanjay Kumar, Sr.DR
Section 143(3)

…KIPL as DAPE of the assessee and further, since KIPL has been remunerated by the assessee for commission activities on arm’s length basis, no further attribution is required in lieu of law laid down by the Hon'ble Supreme Court in the case of Morgan Stanley 292 ITR 416. 33. We, accordingly, hold that pursuant to the specific exclusion of independent agent under Article 5(5) of the DTAA, the case o the assessee falls outside the scope of PE. We, accordingly, direct the Assessing Officer to delete the impugned addition. 34. Appeal of the assessee is allowed. ITA No. 2617/DEL/2017 [Revenue’s appeal] 35. The onl…

M/S United Spirits Limited, Bangalore vs. Joint Commissioner of Income Tax Special Range-7, Bangalore

In the result, ground 7 is allowed for statistical purposes

ITA 3091/BANG/2018[2014-15]Status: DisposedITAT Bangalore22 Nov 2022AY 2014-15

Bench: Shri George George K, Jm & Shri Laxmi Prasad Sahu, Am It(Tp)A No.3091/Bang/2018 : Asst.Year 2014-2015 M/S.United Spirits Limited The Joint Commissioner Of 6Th Floor, Ub Towers, Income-Tax, Special Range-7 V. Bangalore. # 24 Vittal Mallya Road Bangalore – 560 001. Pan : Aaccm8043J. (Appellant) (Respondent)

For Appellant: Sri.Percy Pardiwala, Senior Counsel and Sri.Ankur Pai, AdvocateFor Respondent: Sri. Manjunath Karkihalli, CIT –DR
Section 115PSection 143(2)Section 143(3)Section 14ASection 234BSection 36(1)(iii)Section 92C

…al income principle fails here, since Chapter X brings in a legal fiction/deeming provision and the same is required to be complied with in order to arrive at the total income. As explained by Hon’ble Supreme Court in the case of DIT vs. Morgan Stanely & Co. (292 ITR 416), the object behind enactment of transfer pricing regulations is to prevent shifting of profits outside India. Hence, the interest free loan should be taken as a case of Zero interest and accordingly the impugned loan transactions should also be examined under arms’ length principles. 31. We notice that the decisions rendered by the Mumbai bench…

Adobe Systems Software Ireland Limited, Ireland vs. ACIT, Circle-1(1)(1) Int. Tax., Delhi

In the result, the appeal is allowed

ITA 774/DEL/2022[2017-18]Status: DisposedITAT Delhi21 Oct 2022AY 2017-18

Bench: Shri G.S. Pannu & Shri Saktijit Deyassessment Years: 2017-18

Section 143(3)Section 144C(1)Section 274

…when the transaction has been found to at Arm's Length between foreign party and the Indian AE, then no further attribution is required has already been decided by the decision of the Hon'ble Supreme Court in the case of DIT v. Morgan Stanley & Co. Inc [2007] 292 ITR 416 (SC). This aspect was very much before the Ld. CIT(A) and he has dealt with the same as under:- "As regards determination of profits attributable to a PE in India (MSAS) is concerned on the basis of arm's length principle Article 7(2) is relevant. According to the AAR where there is an international transaction under which a non- resident compens…