Section 144C(13) of the Income Tax Act

Income-tax Act, 2025: s.275

Section 144C(13) falls under section 144C of the Income-tax Act, 1961, which corresponds to section 275 (Reference to Dispute Resolution Panel) of the Income-tax Act, 2025.

Read section 275 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 144C(13) is Engineering Analysis Centre of Excellence (P) Ltd. v. CIT (432 ITR 471), cited in 914 of the 3,426 judgments on BharatTax that turn on this section.

Leading authorities on Section 144C(13)

Engineering Analysis Centre of Excellence (P) Ltd. v. CIT
432 ITR 471 · 2021 · Supreme Court
914
citing judgments

Payments for the supply or use of computer software, where there is no transfer of copyright but only a right to use the copyrighted product, are generally considered business profits and not 'royalty' or 'fees for technical services' under the Income Tax Act, 1961 or relevant DTAAs. This principle also applies to transponder fees, which are not taxable as royalty.

Sony Ericsson Mobile Communications India Pvt. Ltd. v. CIT
374 ITR 118 · 2015 · High Court
499
citing judgments

The existence of an international transaction for Advertising and Marketing Promotion (AMP) expenditure requires the revenue to discharge the burden of proof. An explanation inserted under Section 92B does not automatically make AMP expenditure an international transaction.

CIT v. EKL Appliances Ltd.
345 ITR 241 · 2012 · High Court
422
citing judgments

Transfer pricing adjustments for outstanding receivables are permissible only if the Tax Officer establishes, through analysis over a period, a pattern indicating an international transaction intended to benefit an associated enterprise. The Tax Officer cannot question purely business decisions like royalty payments or exceed jurisdiction by applying cost-benefit analysis to determine the arm's length price of services.

Ishikawajima Harima Heavy Industries Ltd. v. DIT
288 ITR 408 · 2007 · Supreme Court
394
citing judgments

Income from offshore supply of goods and services is not taxable in India if the entire transaction, including transfer of ownership and payments, occurs outside India.

CIT v. De Beers India Minerals (P.) Ltd.
346 ITR 467 · 2012 · High Court
371
citing judgments

For fees for technical or consultancy services to 'make available' technical knowledge or know-how under a DTAA, the service must transmit such knowledge, allowing the recipient to derive an enduring benefit and utilize it independently in the future.

DIT v. Morgan Stanley & Co.
292 ITR 416 · 2007 · Supreme Court
360
citing judgments

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.

Asia Satellite Telecommunications Co. Ltd. v. DIT
332 ITR 340 · 2011 · High Court
359
citing judgments

Payments for the use of equipment, such as satellite transponders, do not constitute 'royalty' under Section 9(1)(vi) of the Income-tax Act, 1961, or under applicable tax treaties, especially when there is no transfer of the right to use a process or underlying technology.

DIT v. New Skies Satellite BV
382 ITR 114 · 2016 · High Court
325
citing judgments

An amendment to the Income Tax Act, such as the Finance Act, 2012 amendment to Section 9(1)(vi) defining royalty, does not automatically override or alter the definition of 'royalty' as provided in a Double Taxation Avoidance Agreement (DTAA) unless the DTAA itself is bilaterally amended. The definition of royalty in a DTAA remains unaffected by unilateral changes to domestic law.

21. In SB Gurbaksh Singh v. Union of India
2 SCC 181 · 2007 · Supreme Court
318
citing judgments
India Vs. Azadi Bachao Andolan 263 ITR 706 (SC); and Vodafone International Holdings B.V v. Union of India
341 ITR 1 · 2012 · Supreme Court
295
citing judgments

Legitimate tax planning is permissible, allowing taxpayers to arrange their affairs to minimize tax liabilities while respecting the "look at test" for transaction genuineness and the separate entity principle in corporate taxation. The source of funds for treaty-beneficial structures does not automatically invalidate the transaction.

Judgments on Section 144C(13)

Solvay Specialities India P.Ltd, Mumbai vs. DCIT 8(2)(2), Mumbai

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

ITA 1369/MUM/2016[2011-12]Status: DisposedITAT Mumbai30 Jul 2018AY 2011-12

Bench: Shri B.R. Baskaran, Am & Shri Amarjit Singh, Jm आयकरअपीलसं/I.T.A. No.1369/Mum/2016 (निर्धारणवर्ा / Assessment Year: 2011-12) Solvay Specialities India बिधम / Dcit-8(2)(2), Room No. 615, 6Th Floor, Aaykar Private Limited Phoenix Vs. House, A-Wing, 4Th Floor, Bhavan, Maharshi Karve 462, S.B. Marg, Lower Road, Mumbai-400020. Parel, Mumbai-400013. स्थायीलेखासं/.जीआइआरसं/.Pan/Gir No. : Aajcs0613F (अपीलाथी / Appellant) .. (प्रत्यथी / Respondent) Assessee By: Shri M.P. Lohia & Hemen Chandaniya Revenue By: Shri Jayant Kumar (Dr) सुनवाईकीतारीख / Date Of Hearing: 30.07.2018 घोषणाकीतारीख /Date Of Pronouncement: 30.07.2018 आदेश / O R D E R Per B.R. Baskaran, Am: The Assessee Has Filed This Appeal Challenging The Order Dated 30-12- 2015 Passed By The Assessing Officer U/S 143(3) R.W.S. 144C(13) Of The Act In Pursuance Of Directions Given By Ld Drp For Assessment Year 2011-12. 2. The Assessee Is, Inter Alia, Challenging The Transfer Pricing Adjustment Of Rs.653.58 Lakhs Made By The Tax Authorities. 3. The Ld A.R Submitted That The Assessee Is Having Three Distinct Segments, Viz., Manufacturing, Trading & Providing Of Services. He Submitted That The Assessee Had Provided Audited Segmental Results Of All The Three Segments Before The Ao. However, The Tpo Preferred To Determine The Arms Length Price Of The International Transactions At The Entity Level. He Submitted That The Tpo Had Made Tp Adjustments On Similar Basis, I.E., At The Entity Level In The Earlier Years Also & The Same Has Been Followed During The Year Under Consideration Also. He Submitted That The Assessee Did Not Furnish Audited Segmental Results Before The Ao/Tpo In The Earlier Years.

For Appellant: Shri M.P. Lohia & HemenFor Respondent: Shri Jayant Kumar (DR)
Section 143(3)