“safe harbour”

Chapter X - Transfer Pricing / Anti-AvoidanceSection 92CBSection 92CB / Rule 10TIA, 10TIB, 10TIC182 judgments

The decision most relied on for safe harbour is Maria Fernandes Cheryl v. ITO (International Taxation) (123 Taxmann.com 252), cited in 65 judgments on BharatTax.

Leading authorities on safe harbour

Maria Fernandes Cheryl v. ITO (International Taxation)

123 Taxmann.com 252 · 2021 · ITAT

citing judgments

The amendment introducing a tolerance band (safe harbour) under section 50C, allowing a difference of up to 10% between actual sale consideration and stamp duty valuation, applies retrospectively. If the difference falls within this limit, the actual sale consideration is adopted as the full value of consideration for computing capital gains.

Lionbridge Technologies (P.) Ltd. v. ITO

77 Taxmann.com 48 · 2017 · Reported

citing judgments

This case does not lay down a clear proposition of law based on the provided excerpts. The passages focus on listing other cases and describing the business of a company rather than stating a legal holding.

Judgments citing safe harbour

Nokia India Pvt. Ltd., Gurgaon vs. JCIT, Special Range-6, New Delhi

In the result, the appeal filed by the assessee is partly allowed as indicated above

ITA 7745/DEL/2018[2014-15]Status: DisposedITAT Delhi30 Aug 2024AY 2014-15

Bench: disregarding the ALP determined by the Appellant and proceeded to determine the ALP himself.

Section 143(3)Section 144CSection 92CSection 92C(3)Section 92D

That in terms of the definitions as provided under clause (j) and (k) of Rule 10TA of the Income Tax Rules, 1962 ("IT Rules") Safe Harbour Rule for International Transactions, the term "operating revenue" does not include any income arising on account of foreign currency fluctuations and hence, gain ... associated enterprise ("AE") and the Appellant is not exposed to foreign exchange fluctuation risk which is borne by the AE.. 7.2 Invocation of Safe Harbour Rules as envisaged under part DB of the IT Rules In this context, the attention of the Hon'ble Tribunal is invited

Shri Rajdeep Singh Chimni, Chandigarh vs. The Asstt. Commissioner of Income Tax, Circle-4(1), Chandigarh

In the result, the addition so made and sustained by the ld CIT(A) is hereby deleted and the appeal of the assessee is allowed

ITA 722/CHANDI/2023[2016-17]Status: DisposedITAT Chandigarh28 Aug 2024AY 2016-17

Bench: SHRI. AAKASH DEEP JAIN (Vice President), SHRI. VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Tejmohan Singh, AdvocateFor Respondent: Shri Vivek Vardhan, JCIT, Sr. DR

Section 143(3)Section 154Section 155(15)Section 50CSection 56(2)(vii)

always be bonafide variations, though to a certain limited extent, in these estimations. Unless, therefore, some kind of a tolerance band or a safe harbour provision, in respect of such bonafide variations, is implicit in the scheme of law, the assessees are bound to face undue hardships. The mechanism under ... Government, even though the initial tolerance band level was taken at 5%, in response to the representations by the stakeholders, this tolerance band, or safe harbour provision, was increased to 10%. There is no particular reason to justify any particular time frame for implementing this enhancement of tolerance band

DCIT, Chennai vs. Avo Carbon India Pvt Ltd., Chennai

In the result, the appeal filed by the Revenue is partly allowed

ITA 501/CHNY/2017[2009-10]Status: DisposedITAT Chennai14 Aug 2024AY 2009-10

Bench: Shri Ss Viswanethra Ravi & Shri Jagadishआयकर अपील सं./Ita No.501/Chny/2017 िनधा9रण वष9 /Assessment Year: 2009-10

For Appellant: Shri SP Chidambaram, AdvocateFor Respondent: Shri A Sasikumar, CIT

Section 143(3)

same was excluded to compute their respective PLI. Nevertheless, this item, in our opinion, is still an operating item. The definition as provided under safe harbour provisions apply in a specific situation only which is not the case here. Therefore, this adjustment is not to be granted. No other ground

Deputy Commissioner of Income Tax, Circle-2(1)(1), Bengaluru vs. Dell International Services India Pvt Ltd, Bengaluru

ITA 722/BANG/2024[2010-11]Status: DisposedITAT Bangalore31 Jul 2024AY 2010-11

Bench: Smt. Beena Pillai & Shri Waseem Ahmed

For Appellant: Smt. Mahima Goud, AdvocateFor Respondent: Shri D.K Mishra, CIT (DR)

Section 10ASection 10BSection 154Section 92CSection 92C(4)

extent confirmed by the appellate forums under the Act; (iii) determined by an advance pricing agreement (iv) is made as per the safe harbour rules framed under section 92CB; or (v) is arising as a result of resolution of an assessment by way of the mutual agreement procedure under

Nabhiraj Ratna Balraj by Legal Heir B.R.Rakesh, Bangalore vs. Income-Tax Officer, Ward-7(2)(1), Bangalore

In the result the appeal of the assessee is allowed

ITA 603/BANG/2024[2016-17]Status: DisposedITAT Bangalore26 Jun 2024AY 2016-17

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2016-17

For Appellant: Ms. Suman Lunkar, CAFor Respondent: Shri Subramanian S., Jt.CIT(DR)(ITAT), Bengaluru

Section 147Section 148Section 234BSection 50C

value exceeds 105% of consideration Yes No as per agreement of transfer Consideration for computing capital gains 12,000 10,000 d) Why the Safe Harbour Limit of 10% Should be Retrospective? Legal maxim 'Law Prospicit Non Respicit' presumes law to be prospective & not retrospective. However, where the legislation ... always be bona fide variations, though to a certain limited extent, in these estimations. Unless, therefore, some kind of a tolerance band or a safe harbour provision, in respect of such bona fide variations, is implicit in the scheme of law, the assessees are bound to face undue hardships

Narain Lal Agrawal, Jaipur vs. DCIT Circle 1 Jaipur, Jaipur

ITA 744/JPR/2023[2020-21]Status: DisposedITAT Jaipur25 Jun 2024AY 2020-21

For Appellant: Sh. Tarun Mittal (CA)For Respondent: Sh. A. S. Nehra (Addl. CIT)

Section 143(3)Section 56(2)Section 56(2)(x)

extracts of decision are as under: Section 50C of the Income-tax Act, 1961 - Capital gains - Special provision for computation of full value consideration (Safe harbour) - Assessment year 2011- 12 - Whether amendment in scheme of section 50C(1), by inserting third proviso thereto and by enhancing tolerance band for variations

Mckinsey Knowledge Centre India Pvt. Ltd., Haryana vs. DCIT Circle 16(1), Delhi

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

ITA 475/DEL/2022[2017-18]Status: DisposedITAT Delhi04 Jun 2024AY 2017-18

Bench: Shri Shamim Yahya & Shri Sudhir Kumarmckinsey Knowledge Centre India Pvt. Ltd., Vs. Dcit, Circle 16 (1), 3Rd Floor, Block Iii, Delhi. Vatika Business Park, Sector 49, Sohna Road, Gurgaon – 122 018 (Haryana). (Pan : Aaccm2356G) (Appellant) (Respondent) Assessee By : Shri Porus Kaka, Sr. Advocate Shri Divesh Chawla, Advocate Revenue By : Shri Rajesh Kumar, Cit Dr Date Of Hearing : 24.04.2024 Date Of Order : 04.06.2024 Order Per Shamim Yahya: This Appeal By The Assessee Is Directed Against The Order Of The Assessing Officer Dated 21.01.2022 Pursuant To The Directions Issued By The Drp For The Assessment Year 2017-18. 2. Grounds Of Appeal Taken By The Assessee Read As Under :-

For Appellant: Shri Porus Kaka, Sr. AdvocateFor Respondent: Shri Rajesh Kumar, CIT DR

ordinary course of business. • IOMEDIA India Pvt. Ltd vs ACIT (ITA No.995IDeIl2021) The above ruling considers that the entity involved has opted for the Safe Harbour Regime for a period of 5 years. Further, it also considers the definition of Eligible International Transaction" as per Rule 10TC, which pertains ... applicability of Safe Harbour Rules only. Further, the order also addressed the adoption of interest rates. 2.9 Additionally, the learned DR mentioned that the Hon'ble Delhi High Court, in the Appellant's own case for AY 2014-15 [2021] 131 taxmann.com 253 (Delhi), left the question of law open

Tata Chemicals Ltd, Mumbai vs. DCIT - 2 (3)(1), Mumbai

ITA 3093/MUM/2023[2019-20]Status: DisposedITAT Mumbai28 May 2024AY 2019-20

For Appellant: Shri Nitesh Joshi a/w SamkitFor Respondent: Shri K.C. Selvamani, CIT-DR

Section 143(3)Section 144CSection 144C(5)Section 80Section 80ISection 92Section 92B

Chemicals Ltd. 11 which is an electricity generation unit in whose case per unit has been determined at Rs.3.99/- which is in accordance with Safe Harbour Rules and also specific external CUP in the case of electricity generation unit. Secondly, he submitted that wherever transfer of goods and services falls

Axis Bank Limited, Ahmedabad vs. Assistant Commissioner of Income Tax, Circle-1(1)(1), Ahmedabad

The appeal of the assessee is partly allowed for statistical purposes

ITA 365/AHD/2022[2018-19]Status: DisposedITAT Ahmedabad10 Apr 2024AY 2018-19

Bench: Mrs. Annapurna Gupta & Shri T.R. Senthil Kumarिनधा"रण वष"/Assessment Year: 2018-19 Axis Bank Limited, Vs. Assistant Commissioner Of “Trishul”, 3Rd Floor, Opp. Income-Tax, Samartheshwar Temple, Nr. Law Circle 1(1)(1), Garden, Ellisbridge, Ahmedabad Ahmedabad-380006 Pan : Aaacu 2414 K अपीलाथ" अपीलाथ"/ (Appellant) अपीलाथ" अपीलाथ" "" "" यथ" "" "" यथ" यथ"/ (Respondent) यथ" Assessee By : Shri Tushar Hemani, Sr. Advocate & Shri Parimalsinh B. Parmar, Ar Revenue By : Dr. Darsi Suman Ratnam, Cit-Dr सुनवाई क" तारीख/Date Of Hearing : 29.11.2023/03.04.2024 घोषणा क" तारीख /Date Of Pronouncement: 10.04.2024 आदेश आदेश/O R D E R आदेश आदेश Per Annapurna Gupta: By Way Of This Appeal, The Assessee-Appellant Has Challenged Correctness Of The Order Dated 28Th July, 2022 Passed By The Assessing Officer Under Section 143(3) R.W.S. 144C(13) R.W.S. 144B Of The Income Tax Act, 1961 [Hereinafter Referred To As “The Act” For Short], For The Assessment Year (Ay) 2018-19. 2. Ground No.1 Raised By The Assessee Reads As Under:- “1. Disallowance In Respect Of Annual Technical Fees (Tax Effect - Rs. 16,84,276) 1.1 The Learned Drp Has Erred In Upholding Addition Made By Ao In Respect Of Treating Annual Technical Services (Ats) Fees Paid To Infosys Limited To The Extent Of Rs. 48.66 Lacs As Prior Period Expense. 1.2. It Is Submitted That The Expenditure Relates To Amount Payable To Infosys & No Part Of The Amount Was Claimed As Expenditure At Any Time In The 2 Axis Bank Limited Vs. Acit Ay : 2018-19

For Appellant: Shri Tushar Hemani, Sr. Advocate &For Respondent: Dr. Darsi Suman Ratnam, CIT-DR

Section 143(3)Section 144C

were completely different in character. To this effect he pointed out the Explanationto Rule 10TA(c) of the Income Tax Rules, 1962, concerning Safe Harbour for International Transaction specifically excluded Letter of Comfort from the definition of corporate guarantee. Our attention was invited to the same as under:- “10TA ... LIBOR plus 225 bps, it would be sufficient to take care of the TP adjustment in question. • That even as per the prevailing “Safe Harbour Rules” (Rule 10TD(2A)(5)(v) , interest rates prescribed for granting loan to AE in the foreign currency, in cases where credit rating

Dlf Urban Pvt Ltd, New Delhi vs. ACIT, Circle, 7(1), New Delhi

ITA 1962/DEL/2022[2016-17]Status: DisposedITAT Delhi08 Apr 2024AY 2016-17

Bench: Shri Shamim Yahya & Shri Anubhav Sharmaassessment Year: 2016-17 Dcit, Vs Dlf Urban Pvt. Ltd., Circle 7(1), 15, Shivaji Marg, New Delhi. New Delhi – 110 015 Pan: Aafcd3019C Assessment Year: 2016-17 Dlf Urban Pvt. Ltd., Vs. Dcit, 15, Shivaji Marg, Circle 7(1), New Delhi – 110 015 New Delhi. Pan: Aafcd3019C (Appellants) (Respondents) Assessee By : Shri R.S. Singhvi, Shri Satyajeet Goel & Shri Rajat Garg, Cas. Revenue By : Shri Rajesh Kumar, Cit, Dr Date Of Hearing : 23.02.2024 Date Of Pronouncement : 08.04.2024 Order Per Anubhav Sharma, Jm: These Are Cross Appeals Preferred By The Assessee & The Revenue Against The Order Dated 30.06.2022 Of The Commissioner Of Income-Tax

For Appellant: Shri R.S. SinghviFor Respondent: Shri Rajesh Kumar, CIT, DR

Section 143(3)Section 92BSection 92C

basis or justification. 5. That on the facts and circumstances of the case, Ld. CIT(A) erred in not allowing the benefit of tolerance/ Safe Harbour Limit of 5%/10% as per the amended provisions of section 92C which is of clarificatory and retrospective nature and duly supported from various

Thermax Babcock & Wilcox Energy Solution Limited, Mumbai vs. Addl/Jt/Dy/CIT/Asstt/ITO/NFAC, Delhi

ITA 739/MUM/2022[2017-18]Status: DisposedITAT Mumbai04 Apr 2024AY 2017-18

Bench: Shri Vikas Awasthy & Shri Amarjit Singh, Accountαντ Μεμβer

For Appellant: Dhanesh Bafna a/wFor Respondent: Anil Sant

Page 1 ITA No.739/Mum/2022 Thermax Babcock & Wilcox Energy Solutions Ltd. Vs. DCIT, Circle 2(3)(1) IN THE INCOME TAX

Motherson Sumi Systems Limited, New Delhi vs. DCIT, New Delhi

In the result, appeal of the assessee is allowed for statistical purposes

ITA 2054/DEL/2015[2010-11]Status: DisposedITAT Delhi27 Mar 2024AY 2010-11

Bench: Shri Shamim Yahya & Ms. Astha Chandraasstt. Year: 2010-11

For Appellant: Shri K.M. Gupta, AdvocateFor Respondent: Shri Anuj Garg, Sr. DR

Section 108(4)Section 10BSection 10B(1)Section 143(3)Section 144CSection 234BSection 271(1)(e)Section 92D

also placed reliance on the finding of the Ld. DRP on page 14 of its order wherein the Ld. DRP have followed the safe harbour rules as mandated by the CBDT. 16. We have heard the Ld. Representatives of the Parties and perused the records. We observe that the impugned

DCIT Cent. Cir. -7(3) (Erstwhile DCIT Cent. Cir. -42), Mumbai vs. Associated Capsules Pvt. Ltd., Mumbai

In the result, the appeal filed by the assessee and the Revenue are allowed for

ITA 4713/MUM/2016[2010-11]Status: DisposedITAT Mumbai20 Mar 2024AY 2010-11

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

Section 143(2)Section 14ASection 250Section 92Section 92BSection 92C(3)

advanced by the assessee during the earlier financial year and during the year under consideration. The Id. TPO/A.O. has also without prejudice considered the safe Harbour Rules notified on 18.09.2013 for the loan transaction upto Rs.50 crores where the interest rate to be applied has to be the base rate

Associated Capsules P.Ltd, Mumbai vs. ACIT Cen Cir 42, Mumbai

In the result, the appeal filed by the assessee and the Revenue are allowed for

ITA 4620/MUM/2016[2010-11]Status: DisposedITAT Mumbai20 Mar 2024AY 2010-11

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: Shri Ketan Ved/For Respondent: Shri Pankaj Kumar

Section 143(2)Section 14ASection 250Section 92Section 92BSection 92C(3)

advanced by the assessee during the earlier financial year and during the year under consideration. The ld. TPO/A.O. has also without prejudice considered the safe Harbour Rules notified on 18.09.2013 for the loan transaction upto Rs.50 crores where the interest rate to be applied has to be the base rate

Lupin Ltd., Mumbai vs. The Dy CIT, Circle-3(4), Mumbai

In the result, the appeal of the assessee in I

ITA 77/MUM/2021[2013-14]Status: DisposedITAT Mumbai18 Mar 2024AY 2013-14

Bench: Shri Pavan Kumar Gadale, Jm & Ms Padmavathy S, Am

For Appellant: Shri Rajan Vora, Shri PranayFor Respondent: Ms. Manju Thakur, Sr. DR

Section 10ASection 115JSection 143(3)Section 154Section 271(1)(c)Section 37(1)

towards loan facility granted to its AE is only a letter of comfort and not a guarantee. We notice that Rule 10TA of Safe Harbour Rules for International Transactions defines "corporate guarantee" as explicit corporate guarantee extended by a company to its wholly owned subsidiary being a non-resident

Asstt. CIT -Circle-3(4), Mumbai vs. M/S. Lupin Ltd., Mumbai

In the result, the appeal of the assessee in I

ITA 1241/MUM/2021[2013-14]Status: DisposedITAT Mumbai18 Mar 2024AY 2013-14

Bench: Shri Pavan Kumar Gadale, Jm & Ms Padmavathy S, Am

For Appellant: Shri Rajan Vora, Shri PranayFor Respondent: Ms. Manju Thakur, Sr. DR

Section 10ASection 115JSection 143(3)Section 154Section 271(1)(c)Section 37(1)

Gandhinagar District Co.Op.Milk Producers Union Limited, Gandhinagar vs. The ACIT, Circle Gandhinaga, Gandhinagar

In the result, appeal of the assessee is allowed

ITA 512/AHD/2023[2014-15]Status: DisposedITAT Ahmedabad08 Mar 2024AY 2014-15

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Tushar Hemani, Sr. Advocate & ShriFor Respondent: Dr. DArsi Suman Ratnam, CIT D.R. & Shri

Section 139(1)Section 143(3)Section 147Section 148Section 80PSection 80P(2)(c)Section 80P(2)(d)

order under Section 143(3) was passed on 28.12.2016. On verification of available record, it was found that though assessee had made application under safe harbour rule, no order was issued. The system of safe harbour rules was not followed properly and one of the consequences was that the other

Iomedia India Private Limited, Delhi vs. ACIT Circle-12(2), New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 995/DEL/2021[2016-17]Status: DisposedITAT Delhi28 Feb 2024AY 2016-17

Bench: Shri M. Balaganesh & Shri Yogesh Kumar Usm/S. Iomedia India Pvt. Ltd, Vs. Acit, Level-4, Regus Rectangle Circle-12(3), No. 1, D-4, Saket, New Delhi Commercial Complex, Delhi (Appellant) (Respondent) Pan: Aacci5116N

For Appellant: Mr. Pancham Sethi, CAFor Respondent: Shri Rajesh Kumar, CIT(DR)

Section 234BSection 234CSection 271(1)(c)Section 271ASection 92C

income for the Asst Year 2016-17 on 25.11.2016 declaring total income of Rs 3,81,65,380/- by offering income by adopting Safe Harbour Rules in terms of Rule 10TD(2)(iii) of the Income Tax Rules. The assessee company is engaged in the business of outsource services ... Associated Enterprise Iomedia Inc. US. The assessee had filed the audit report in Form 3CEFA stating that the assessee had opted for the Safe Harbour Regime for a period of 5 years starting from Asst Year 2013-14 to Asst Year 2017-18. The assessee raised invoices for the services

DCIT, Aayakar Bhawan Poorva., Kolkata vs. M/S. Delight Suppliers Pvt. Ltd, Kolkata

In the result, the appeal of the revenue is dismissed

ITA 285/KOL/2023[2012-13]Status: DisposedITAT Kolkata26 Feb 2024AY 2012-13

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.285/Kol/2023 Assessment Years: 2012-13

Section 115JSection 143(2)Section 143(3)Section 250Section 50C

deleting the income under the head capita! gains to the tune of Rs. 15,08,720/ and allowing the assessee’s claim of safe harbour rule of 5% variation between stamp duty value and sale consideration for the A Y 2012 13 under 3 proviso of section ... valuation report of the DVO and also considering the Page 4 of 6 I.T.A. No. 285/Kol/2023 A Y: 2012-13, Delight Suppliers Pvt. Ltd. safe harbour rule of 5% as per the 3rd proviso to section 50C of the Act allowed in favour of the assessee observing as under

Rajpal Mehra (HUF), Mumbai vs. ACIT Circle 17 (1), Mumbai

ITA 2817/MUM/2023[2016-17]Status: DisposedITAT Mumbai17 Jan 2024AY 2016-17

Bench: Justice (Retd.) C V Bhadang, Hon’Ble & Shri B R Baskaran, Hon’Ble

For Appellant: Shri Hitesh Shah, CAFor Respondent: Shri Suni Mathews (Sr. AR)

Section 143(3)Section 48Section 50C

Suni Mathews (Sr. AR) Date of Hearing : 06.12.2023 Date of Pronouncement: 17.01.2024 O R D E R Per Justice (Retd.) C V Bhadang : Whether “safe harbour limit of 5%” as introduced by 3rd proviso to sub section (1) of section 50C of the Income Tax Act, 1961 (Act, for short ... Assessing Office to make an addition. In that case reliance was placed on the further amendment of the proviso by Finance Act, 2020 enhancing “safe harbour limit” from 5% to 10%. It was contended on behalf of the assessee that the amendment would be retrospective in nature, which submission