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“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
65
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
10
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

DCIT CC 8(3)(Erstwhile DCIT, CC-46, Mumbai vs. Jsw Steels Ltd, Mumbai

Appeal of the revenue is partly allowed and appeal of the assessee is dismissed

ITA 5327/MUM/2017[2011-12]Status: DisposedITAT Mumbai30 Jun 2023AY 2011-12
Section 14A

average spread of 2.19% to assessee's cost of borrowing i.e. 7.59%, cost of domestic borrowings was worked out to be 9.78%. Relying upon safe harbour rules, Prime Lending Rate was worked out to be 12.75%. The ALP based on Indian Corporate Bond Rates was worked

DCIT CC 8(3)(Erstwhile DCIT, CC-46, Mumbai vs. Jsw Steels Ltd, Mumbai

Appeal of the revenue is partly allowed and appeal of the assessee is dismissed

ITA 5326/MUM/2017[2010-11]Status: DisposedITAT Mumbai30 Jun 2023AY 2010-11
Section 14A

average spread of 2.19% to assessee's cost of borrowing i.e. 7.59%, cost of domestic borrowings was worked out to be 9.78%. Relying upon safe harbour rules, Prime Lending Rate was worked out to be 12.75%. The ALP based on Indian Corporate Bond Rates was worked

DCIT CC 8(3), Mumbai vs. Jsw Steels Ltd, Mumbai

Appeal of the revenue is partly allowed and appeal of the assessee is dismissed

ITA 5325/MUM/2017[2009-10]Status: DisposedITAT Mumbai30 Jun 2023AY 2009-10
Section 14A

average spread of 2.19% to assessee's cost of borrowing i.e. 7.59%, cost of domestic borrowings was worked out to be 9.78%. Relying upon safe harbour rules, Prime Lending Rate was worked out to be 12.75%. The ALP based on Indian Corporate Bond Rates was worked

DCIT CC 8(3), Mumbai vs. Jsw Steels Ltd, Mumbai

Appeal of the revenue is partly allowed and appeal of the assessee is dismissed

ITA 4632/MUM/2017[2008-09]Status: DisposedITAT Mumbai30 Jun 2023AY 2008-09
Section 14A

average spread of 2.19% to assessee's cost of borrowing i.e. 7.59%, cost of domestic borrowings was worked out to be 9.78%. Relying upon safe harbour rules, Prime Lending Rate was worked out to be 12.75%. The ALP based on Indian Corporate Bond Rates was worked

Jsw Steel Limited, Mumbai vs. ACIT, CC-46, Mumbai

Appeal of the revenue is partly allowed and appeal of the assessee is dismissed

ITA 4287/MUM/2017[2008-09]Status: DisposedITAT Mumbai30 Jun 2023AY 2008-09
Section 14A

average spread of 2.19% to assessee's cost of borrowing i.e. 7.59%, cost of domestic borrowings was worked out to be 9.78%. Relying upon safe harbour rules, Prime Lending Rate was worked out to be 12.75%. The ALP based on Indian Corporate Bond Rates was worked

Turner & Townsend Pvt. Ltd., New Delhi vs. ACIT, Circle- 25(2), New Delhi

In the result, Appeal of the assessee is allowed

ITA 8763/DEL/2019[2012-13]Status: DisposedITAT Delhi28 Jun 2023AY 2012-13

Bench: Shri Anil Chaturvedi & Shri Yogesh Kumar U.S.

For Appellant: Department by: Shri Mrinal Kumar, Sr. DFor Respondent: Shri Mrinal Kumar, Sr. D
Section 139(1)Section 143(2)Section 143(3)Section 144C

earned a margin [operating profit on operating cost) of 3.05% as per the Transfer Pricing documentation and revised margin computed at 7.51% based on safe harbour rules, whereas the comparable companies earned a corresponding three year average margin of 5.47% thus satisfying the arm's length principle. (v) Pursuant

Axia Infoserve LLP, Mumbai vs. National E-Assessment Centre, Delhi

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

ITA 3142/MUM/2022[2018-19]Status: DisposedITAT Mumbai02 May 2023AY 2018-19

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bleaxia Infoserve Llp V. Additional/Joint/Dy/Acit 16Th Floor, Tower 2A National E-Assessment Centre One Indiabulls Centre Delhi Senapati Bapat Road, Elphinstone Road Mumbai- 400013 Pan: Abifa7158G (Appellant) (Respondent) Assessee Represented By : Shri Nitesh Joshi Department Represented By : Shri Minal Kamble

Section 142(1)Section 143(1)Section 143(2)Section 56(2)(x)

will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years Explanatory Notes to Finance Act 2020 Increase in safe harbour limit of 5 per cent. under section 43CA, 50C and 56 of the Act to 10 per cent.. Section 43CA of the Act, inter ... under the head "Income from other sources". Thus, the present provisions of section 43CA, 50C and 56 of the Act provide for safe harbour of five per cent. Representations have been received in this regard requesting that the said safe harbour of five per cent may be increased

DCIT, New Delhi vs. M/S Rampgreen Solutions Pvt. Ltd., (Erstwhile Vcostomer Services India Pvt. Ltd), New Delhi

In the result, the appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed

ITA 1618/DEL/2016[2011-12]Status: DisposedITAT Delhi24 Mar 2023AY 2011-12

Bench: Shri G. S. Pannua N D Shri Challa Nagendra Prasad

Section 143(3)Section 144C(5)Section 14ASection 234ASection 271(1)(c)Section 92C

perused the record of the case. We find considerable force in the submission of Id. counsel for the assessee that ld. DRP wrongly invoked Safe Harbour Rule for coming to the conclusion that forex gain/ loss was not to be treated as operating income/ loss for current assessment year because ... Safe Harbour Rules, in any case, were applicable from 18-9-2013 and prior to that the said Rules could not be applied. That apart, it is not disputed that in the case of assessee forex gain/ loss was related to sale price of export, which was in US dollar

M/S. Rampgreen Solutions Pvt. Ltd., Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed

ITA 1404/DEL/2016[2011-12]Status: DisposedITAT Delhi24 Mar 2023AY 2011-12

Bench: Shri G. S. Pannua N D Shri Challa Nagendra Prasad

Section 143(3)Section 144C(5)Section 14ASection 234ASection 271(1)(c)Section 92C

perused the record of the case. We find considerable force in the submission of Id. counsel for the assessee that ld. DRP wrongly invoked Safe Harbour Rule for coming to the conclusion that forex gain/ loss was not to be treated as operating income/ loss for current assessment year because ... Safe Harbour Rules, in any case, were applicable from 18-9-2013 and prior to that the said Rules could not be applied. That apart, it is not disputed that in the case of assessee forex gain/ loss was related to sale price of export, which was in US dollar

Gvk Power and Infrastructure Limited, Jegurupadu vs. DCIT, Circle-1, Rajahmundry

In the result, appeal of the assessee is partly allowed

ITA 93/VIZ/2022[2017-18]Status: DisposedITAT Visakhapatnam16 Mar 2023AY 2017-18

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Ble

For Appellant: Sri GVN Hari, AdvocateFor Respondent: Sri MN Murthy Naik, CIT-DR
Section 143(2)Section 143(3)Section 92C

assessee and hence justified the charging of higher Corporate Guarantee Fees @ 1.90%. Further, the Ld. DR submitted that as per Rule 10TD of Safe Harbour Rules, the rate specified therein was 1% for guarantees above Rs. 100 Crs. The Ld. DR therefore pleaded that the order ... upheld. Contradicting the Ld. DR, the Ld. AR submitted that the assessee has not opted for Safe Harbour Rules and hence it cannot be applied. 6. We have heard both the sides and perused the material available on record and the orders of the Ld. Revenue Authorities. We find from

DCIT, Circle- 16(2), New Delhi vs. Meneta Automotive Components Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 1058/DEL/2018[2008-09]Status: DisposedITAT Delhi07 Feb 2023AY 2008-09

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. G. C. Srivastava, Adv. &For Respondent: Sh. Bhagwati Charan, Sr. DR
Section 92C

These provisions came into force w.e.f. Assessment Year 2002-2003 and have seen a number of amendments over the years, including the insertion of Safe Harbour and Advance Pricing Agreement provisions and the extension of the applicability of transfer pricing provisions to Specified Domestic Transactions. 2. In terms ... accordance with Rule 10 P of the Income-tax Rules. 4.4 The TPO is also required to play an important role in respect of Safe Harbour provisions. Whenever a reference is made to the TP O under sub rule (4) or sub-rule (10) of Rule

D.C.I.T., CC - 4(4), Kolkata vs. Electrosteel Casting Ltd., Kolkata

In the result, the appeal of the revenue is dismissed

ITA 485/KOL/2022[2016-2017]Status: DisposedITAT Kolkata29 Dec 2022AY 2016-2017

Bench: Shri Rajpal Yadav, Vice- & Shri Girish Agrawalassessment Years: 2016-17 Deputy Commissioner Of M/S. Electrosteel Casting Ltd. Income-Tax, Central G.K. Tower Vs. Circle-4(4), Kolkata. 19, Camac Street Kolkata -700017 (Pan: Aaace4975B) (Appellant) (Respondent)

Section 143(3)Section 14ASection 43(1)

above order for A.Y.2007-08" 84(D). Even the Assessee has paid 0.40% as Guarantee Commission to a Bank for similar services. The Safe Harbour rules prescribing 2% as the Guarantee Commission is not relevant as those rules are relevant only to an eligible Assessee who opts to be governed

Xchanging Solutions Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal is partly allowed

ITA 292/BANG/2022[2017-18]Status: DisposedITAT Bangalore21 Dec 2022AY 2017-18

Bench: Shri N.V. Vasudevan & Ms. Padmavathy S

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri K. Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru
Section 143(2)Section 143(3)

available in respect of the revenue generated by this company and that the content management, Analytic services are considered to be KPO as per safe harbour rules. This comparable was decided to be excluded from the list of comparables by the coordinate bench of Tribunal vide

Hp India Sales Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-3(1)(1), Bangalore

In the result, ground 14 is allowed for statistical purposes

ITA 283/BANG/2022[2017-18]Status: DisposedITAT Bangalore07 Dec 2022AY 2017-18

Bench: Shri George George K, Jm & Shri Laxmi Prasad Sahu, Am It(Tp)A No.283/Bang/2022 : Asst.Year 2017-2018 M/S.Hp India Sales Private Ltd. The Assistant Commissioner No.24, Salarpuria Arena Of Income-Tax, Circle 3(1)(1) V. Bangalore. Hosur Main Road Adugodi Bengaluru – 560 030. Pan : Aaacc9862F. (Appellant) (Respondent) Appellant By : Sri.Ajay Vohra, Advocate Respondent By : Sri.Arun Kumar, Cit(Tp)-2-Dr Date Of Pronouncement : 07.12.2022 Date Of Hearing : 06.12.2022 O R D E R Per George George K, Jm : This Appeal At The Instance Of The Assessee Is Directed Against Final Assessment Order Dated 28.02.2022 Passed U/S 143(3) R.W.S. 144C(13) Of The I.T.Act. The Relevant Assessment Year Is 2017-2018. 2. The Assessee Has Raised 13 Grounds In Its Memorandum Of Appeal Dated 22.06.2022. The Learned Ar During The Course Of Hearing, Did Not Raise Any Specific Plea With Regard To Grounds 1 To 5, 10, 12 & 13 (Also Sub-Grounds), Hence, The Same Are Dismissed. The Surviving Grounds, Namely, Grounds 6 To 9, 11 & Its Sub-Grounds, Read As Follows:-

For Appellant: Sri.Ajay Vohra, AdvocateFor Respondent: Sri.Arun Kumar, CIT(TP)-2-DR
Section 143(3)Section 37Section 92B

computation of the ALP and the manner of the determination of the ALP by the TPO, and Section 92CB which provides for the "safe harbour" rules for determination of the ALP, can be applied only if the TP adjustment involves substitution of the transaction price with the ALP. Rules

Tyco Fire and Security India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

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

ITA 270/BANG/2021[2016-17]Status: DisposedITAT Bangalore28 Nov 2022AY 2016-17

Bench: Shri N. V. Vasudevan & Shri Chandra Poojariit(Tp)A No.270/Bang/2021 Assessment Year : 2016-17 Acit, M/S. Tyco Fire & Security India Private Limited, Vs. D-601, Rmz Centennial, Circle - 7(1)(1), Kundalahalli Main Road, Bengaluru. Bengaluru – 560 048. Pan : Aabct 0087 C Appellant Respondent Assessee By : Shri. Rajan Vora, Ca Revenue By : Shri. Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 27/11.09.2022 Date Of Pronouncement : 28.11.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. Rajan Vora, CAFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 144C(13)Section 92Section 92(1)Section 92B(1)

margins of the software services segment. IT(TP) A No. 270/Bang/2021 Tyco Fire and Security India Pvt.Ltd. 18. It was submitted that under the safe Harbour Rules under Rule 10TA of the Income Tax Rules, 1962 (Rules), software development services include support services like debugging of systems and services

Finastra Software Solutions (India) Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

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

ITA 268/BANG/2021[2016-17]Status: DisposedITAT Bangalore28 Nov 2022AY 2016-17

Bench: Shri George George K. & Ms. Padmavathy S.It(Tp)A No. 268/Bang/2021 (Assessment Year: 2016-17)

For Appellant: Shri T. Suryanarayana, AdvFor Respondent: Shri Manjunath Karkihalli, CIT-DR
Section 143(3)Section 80G

pure software development. It is submitted that the software services provided by Infobeans are not pure software development services as defined in the safe harbour rules. This company came to be excluded by the TPO in the earlier years on the basis that it is engaged in product development

M/S. Radisys India Limited (Formerly Known As Radisys India Private Limited), Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 5(1)(1), Bangalore

In the result, the appeal filed by the assessee stands partly allowed

ITA 190/BANG/2022[2017-18]Status: DisposedITAT Bangalore18 Nov 2022AY 2017-18
For Appellant: Shri Mahveer C Jain, A.RFor Respondent: Shri Binod Kumar Singh, D.R
Section 143(3)Section 144BSection 144C(13)

available in respect of the revenue generated by this company and that the content management, Analytic services are considered to be KPO as per safe harbour rules. This comparable was decided to be excluded from the list of comparables by the IT(TP)A No.190/Bang/2022 M/s. Radisys India Limited, Bangalore

Global E-Business Operations Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-5(3)(2), Bangalore

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

ITA 174/BANG/2022[2017-18]Status: DisposedITAT Bangalore16 Nov 2022AY 2017-18

Bench: Shri Chandra Poojari & Shri George George K.

For Appellant: Shri Padam Chand Khincha, A.RFor Respondent: Shri Harinder Kumar, D.R
Section 144(3)Section 37Section 92C

akin to provision of ITES services or back office support services. As per the Rule 10TA of the Income Tax Rules, 1962 (Safe Harbour Rules), the remote maintenance services which contributes 60% of the revenue of the company is very much within the definition of ITES. As the company ... website information, argued that the company is into diversified activities that can be classified as KPO services as per the definition of safe harbour rules. At the outset, he noted that the information put in Website cannot be given complete credence, as they are mere forward-looking information and statements

M/S Dell International Services India Private Limited, Bangalore vs. Joint Commissioner of Income Tax Ltu, Bangalore

In the result, the appeals of the assessee and the revenue are partly allowed

ITA 932/BANG/2017[2012-13]Status: DisposedITAT Bangalore14 Nov 2022AY 2012-13

Bench: Smt. Beena Pillai & Ms. Padmavathy Sit(Tp)A No.844/Bang/2017 Assessment Year : 2012-13 The Joint Vs. M/S.Dell International Services India Commissioner Of Private Limited, Income Tax, Ltu, (For The Merged Entity Dell India Bangalore. Private Limited), No.12/1, 12/2A, 13/1A, Divyashree Gardens, Challagutta Village, Varthur Hobli, Bangalore – 560 071. Pan : Aaach1925Q Appellant Respondent It(Tp)A No.932/Bang/2017 Assessment Year : 2012-13 M/S.Dell International Services Vs. The Joint Commissioner India Private Limited, Of Income Tax, Ltu, (For The Merged Entity Dell India Bangalore. Private Limited), Bangalore – 560 071. Pan : Aaach1925Q Appellant Respondent Revenue By : Shri Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru. Assessee By : Shri T. Suryanarayana, Advocate Date Of Hearing : 07.11.2022 Date Of Pronouncement : 14.11.2022

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Shri
Section 143(2)Section 92C

catalogue publishing. The Assessee submitted that the aforesaid services are not in the nature of ITES. The Assessee pointed out that as per the safe harbour rules introduced by the CBDT ITES has been defined as business process outsourcing services provided mainly with the assistance or use of information technology

Joint Commissioner of Income Tax (Ltu), Bangalore vs. M/S Dell International Services India Private Limited, Bangalore

In the result, the appeals of the assessee and the revenue are partly allowed

ITA 844/BANG/2017[2012-13]Status: DisposedITAT Bangalore14 Nov 2022AY 2012-13

Bench: Smt. Beena Pillai & Ms. Padmavathy Sit(Tp)A No.844/Bang/2017 Assessment Year : 2012-13 The Joint Vs. M/S.Dell International Services India Commissioner Of Private Limited, Income Tax, Ltu, (For The Merged Entity Dell India Bangalore. Private Limited), No.12/1, 12/2A, 13/1A, Divyashree Gardens, Challagutta Village, Varthur Hobli, Bangalore – 560 071. Pan : Aaach1925Q Appellant Respondent It(Tp)A No.932/Bang/2017 Assessment Year : 2012-13 M/S.Dell International Services Vs. The Joint Commissioner India Private Limited, Of Income Tax, Ltu, (For The Merged Entity Dell India Bangalore. Private Limited), Bangalore – 560 071. Pan : Aaach1925Q Appellant Respondent Revenue By : Shri Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru. Assessee By : Shri T. Suryanarayana, Advocate Date Of Hearing : 07.11.2022 Date Of Pronouncement : 14.11.2022

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Shri
Section 143(2)Section 92C

catalogue publishing. The Assessee submitted that the aforesaid services are not in the nature of ITES. The Assessee pointed out that as per the safe harbour rules introduced by the CBDT ITES has been defined as business process outsourcing services provided mainly with the assistance or use of information technology