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2016 (4) TMI 400 - ITAT MUMBAI

2016 (4) TMI 400 - ITAT MUMBAI - [2016] 48 ITR (Trib) 707 - Transfer pricing adjustment - impact of amendment in section 92B, by the virtue of Finance Act 2012 - Held that:- No ALP adjustments can be made, on the facts of this case, in respect of delay in realization of sale proceeds. - The amendment in Section 92B, at least to the extent it dealt with the question of issuance of corporate guarantees, is effective from 1st April 2012. The assessment year before us being an assessment year pr .....

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he same may be treated as withdrawn. Learned departmental representative does not oppose this prayer. The cross-objection is accordingly dismissed as withdrawn. That leaves us with the cross appeals. 2. These cross appeals call into question correctness of the order dated 16th December, 2013 passed by the learned CIT(A) in the matter of assessment under section 143(3) of the Income Tax Act,1961, for the assessment year 2009- 10. Grievances raised by the parties are as follows: Grievances raised .....

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her erred in characterizing delay in receipts from debtors in ordinary course of sale as extension of credit and termed it as loan and thereby applying an interest. (iii) On the facts and in the circumstances of the case, and in law, the learned AO has erred and the Hon'ble DRP further erred in making an adjustment on account of notional interest on outstanding receivables from AE when appellant does not charge any interest to third parties on the delayed receivables. (iv) On the facts and i .....

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e Hon'ble DRP further erred in charging interest on the total outstanding receivables from AE, they failed to consider the fact that appellant also had outstanding payables to the AE. (vi) On the facts and in the circumstances of the case, and in law, the learned AO has erred and the Hon ble DRP further erred in charging interest on the outstanding receivables for full year, and failed to consider that the average number of days for which invoices have been outstanding was only 228 days. (vi .....

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Further, appellant prays that if any interest adjustment is required to be made, the same should be made at LIBOR rate for financial year 2008-09, since the international transactions have been undertaken in foreign currency. Further, the cost of borrowing of the appellant for availing packing credit and post-shipment credit is average 4.33%. Grievances raised by the Assessing Officer: 1. On the facts and circumstances of the case, the Hon'ble DRP-II, Mumbai has erred in deleting the mark-u .....

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facts are like this. The assessee is engaged in the business of manufacturing, import and export of cut and polished diamonds. During the relevant previous year, the assessee had international transactions with an associated enterprises by the name of Doshi Impex Limited, Hong Kong. The sale transactions to this AE were benchmarked on the basis of TNMM. That, however, is not the point of dispute before us. During the course of the proceedings before the Transfer Pricing Officer, it was noticed .....

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not be made, on the basis of average cost of borrowing, plus 3% markup. The submission of the assessee that Section 92B does not apply to the fact situation and other arguments advanced by the assessee were rejected, and the Transfer Pricing Officer proceeded to make arm s length price adjustment on account of delayed realization of debts from the assessee by observing as follows: However, the assessee s submissions are too general in nature. The TP provisions, including Section 92B and Section .....

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be charged at the rate of % per annum on the receivable amount from the AEs as below: Therefore, the interest needs to be charged on the receivables from the AEs and advance provided to the AAEs following the arm s length principle. The assessee has not provided the actual cost of borrowing during the FY 2008-09. Therefore, prime landing rate for the working capital @ 12.5% charged by the State Bank of India for the financial year 2008-09 is adopted as the CUP. The PLR is ascertainable from the .....

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Aggrieved by the adjustment so proposed, assessee did carry the mater in objections before the Dispute Resolution Panel. So far as this issue is concerned, the assessee, inter alia, stated as follows: We refer to the hearing dated October 16, 2013 which we had with your Honours. During the course of the hearing your goodself had requested for additional information on without prejudice basis with respect to Ground 7- Interest on receivables. The additional details/information are submitted belo .....

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utstanding receivable does not fit within the meaning of international transactions, as the transfer pricing adjustment can be made u/s 92 in respect of an "international transaction". A continuing debit balance is not an "international transaction" per se but is a "result" of the international transaction. Even the residuary clause in the definition of international transaction i.e. "any other transaction having a bearing on the profits, incomes, losses or ass .....

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. The exports to the AE are to the tune of ₹ 90,14,39,072. Thus, it is pertinent to note that the AE brought substantial business to assessee and balance outstanding with AEs is out of commercial expediency. 4. The assessee also made sales to non AEs during the year under consideration where it has unpaid receivable at the year end. We would like to highlight that die assessee did not charge any interest on unpaid receivables from both AE and third parties, then there was no basis for impo .....

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over, there is no such agreement whereby interest is to be charged on such a delayed payment". 6. Placing reliance on this decision, it is clear that adjustment cannot be made on hypothetical and notional basis until and unless there is some material on record that there has been under charging of real income. 7. The assessee has allowed the average credit period of 228 days to the AE and as mentioned above it also has outstanding receivables in export sales made to the third parties where .....

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ould like to mention state that since the outstanding is a result of international transactions, hence SBI PLR can not be taken as the interest rate, and instead interest on receivable should be calculated by adopting the London Inter-bank offered rate (LIBOR), 10. Without prejudice to all our contention, if we take SBI PLR plus 3% and interest for the period over-flowing the reasonable time limit, then the adjustment would reduce to ₹ 14,579,778. 6. While DRP did uphold the adjustment in .....

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(the AO) is directed to restrict the interest on receivable at the SBI PLR. 7. It is in this background that the Assessing Officer has made the impugned arm s length price adjustment in respect of delay in realization of sale proceeds from the AE. None of the parties is satisfied. While the assessee is aggrieved of the adjustment being so made, the Assessing Officer is aggrieved that of the reduction in the arm s length price of the interest rate as the mark up of 3% stands deleted by the DRP. .....

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sions of the coordinate benches in the cases of Kusum Healthcare Pvt Ltd Vs ACIT [(2015) 62 taxmann.79 (Del)] and Micro Ink Ltd Vs ACIT [(2014) 63 taxmann.353 (Ahd)]. Our attention is also invited to the decision a coordinate bench, in the case of Nimbus Communications Ltd Vs ACIT [(2011) 139 TTJ 214 (Mum)] holding that a continuing debit balance is not an international transaction at all. It is submitted that there is no delay in realization of export proceeds from the AE. It is pointed out tha .....

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In this regard, reliance is placed on the observations made by a coordinate bench of this Tribunal in the case of Bharti Airtel Limited Vs ACIT [(2014) 63 SOT 113 (Del)] Learned counsel also placed reliance on the submissions made before the authorities below. On the strength of, inter alia, these submissions, learned counsel urged us to delete the impugned ALP adjustment in respect of delayed realization of export proceeds from the AEs. 9. Learned Departmental Representative contends that the .....

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ate bench of this Tribunal, in the case of i-Gate Computer Systems Ltd Vs ACIT and vice versa (ITA No. 2504/PN/2012), wherein it is, inter alia, stated that the Hon ble Bombay High Court, in assessee s own case relating to the assessment year 2002-03 in Income Tax Appeal No. 1148/2012, vide judgment dated 28.2.2013, has held that in view of the amendment by the Finance Act 2012 with retrospective effect from 1st April 2002, the said transaction of charging of interest from the AEs is covered und .....

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available, the CUP method is to be used for ascertaining the arm s length price of an international transaction, in preference over the TNMM method, as TNMM is an indirect method, a method of last resort and far less reliable than a direct method like CUP. He submits that the delay in realization of debts is a separate transaction, and, therefore, as long as it can be benchmarked on the basis of internal CUP, there cannot be any occasion to use the TNMM. Turning to the proposition that when the .....

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ccount rather than sales account. Whatever may be the treatment given for head of taxation, the accounting for interest is by credit to the interest account. In any event, once the transaction is found to be an arm s length transaction, it is on the assesse to demonstrate, with the help of documentation required under rule 10D(1)(k), that the transaction is at an arm s length. Coming to the judicial precedent in the case of Sony Ericsson Mobile Corporation Pvt. Ltd. Vs. ACIT [(2015) 374 ITR 118 .....

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larly placed comparables, it is wholly fallacious to come to the conclusion that since PLI is found to be comparable, separate adjustment in not required in respect of the interest on late realization of debts. 10. In his brief rejoinder, learned counsel reiterated his submissions and emphasized the contention that when time taken in realization of debts from AEs is considered vis-à-vis the time taken in realization with non AEs, there is no delay at all. 11. We have heard the rival submi .....

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st income is an integral part of the PBIT inasmuch as interest income, in cases other than finance companies, is required to be included in the other income and thus affects the profit before interest and taxes. While profit before interest and taxes does not take into account interest expenditure , it does take into account interest income because the interest income is part of the other income , under pre amended as well as post amended schedule VI to the Companies Act, which is duly taken int .....

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nal, in the case of Micro Ink Ltd Vs ACIT (supra), as follows: 7. We find that, as evident from audit report on form 3CEB (pages 39 to 52 of the paper-book), the arm's length price of exports to the AEs, including Micro USA, has been determined on the basis of the transactional net margin method (TNMM). By way of a note at page 51, it is specifically stated that "further, the said amount of ₹ 2428.26 millions has also been determined/ computed by the assessee having regard to the .....

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sessed, with or without making adjustments, as a bundled transaction, it would be illogical and improper to treat AMP expenses as a separate international transaction, for the simple reason that if the functions performed by the tested parties and the comparables match, with or without adjustments, AMP expenses are duly accounted for. It would be incongruous to accept the comparables and determine or accept the transfer price and still segregate AMP expenses as an international transaction," .....

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ng functions incurs substantial expenditure on AMP, three times more than in case 1, but the purchase price being lower, the Indian AE gets adequately compensated and, therefore, no transfer pricing adjustment is required. In case we treat the AMP expenses in case 2 as ₹ 501-, i.e. identical as case 1 and AMP of ₹ 100 as a separate transaction, the position in case 2 would be: Particulars Case 2 Sales 1,000 Purchase Price 500 Gross Margin 500 (50%) Overhead expenses 300 Marketing exp .....

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NMM analysis, by taking operating profit figure which incorporate financial impact of the excess credit period allowed, will be adjusted again separately as well. Of course, in the example used by Hon'ble Delhi High Court, the AMP expenses are deductibles in computation of operating profit but that does not make any material difference because the interest levy for late realization of debtors, being inextricably connected with the sales, is also part of operating income. In the case of Nirma .....

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occasion to make adjustment for notional interest on delayed realization of debtors. One can understand separate adjustment for excess credit period when the arm's length price for exports has been benchmarked on the CUP basis but not in a case when the arm's length price of the exports has been benchmarked on the basis of TNMM. The very conceptual foundation, for separate adjustment for delayed realization of debtors and on the facts of this case, is thus devoid of legally sustainable .....

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assessee did have trading transactions in respect of the finished goods with trading subsidiaries in China and Hong Kong but it is not even the case of the TPO that excessive credit period was allowed to these AEs vis-à-vis the credit period allowed to independent enterprises, nor any ALP adjustment has been recommended in connection with the same. This fact, if anything, shows that the credit period allowed to the AEs is comparable with credit period of non AEs in respect of similar goo .....

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eping generalizations as implicit in the arguments before us, to at least indicate that such a delay in realization of debts in similar transactions is absent in arm's length transactions, these adjustments cannot be made even when sales are benchmarked on CUP basis. The delay in realization of debts, resulting in a continuing debit balance, is not a standalone international transaction per se, but is a result of the international transaction as it only reflects that the related payment has .....

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and commerce is seldom so simple. It is not at all necessary that a payment is to be made as soon as goods or services are delivered. A call is to be taken by the vendor, in consultation with its client and based on the business exigencies, as to what should be the terms on which payments for the supplies is to be made. It is a harsh commercial reality that immediate payments are more of exceptions rather than rule, and more so in a complex case in which the assessee is sole vendor and the very .....

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t of inter se relationships between the AEs and it is, therefore, not the delay simplictor in payment but delay in payment vis-à-vis similar situations with non AEs (i.e. independent enterprises) which is of crucial consideration. Such a comparison cannot be based on the hypothesis as to what would have, in the wisdom of the TPO, happened if assessee was to have similar transactions with non- AEs. The comparison has to be based on real transactions of similar nature, if at all such transa .....

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and conditions, including terms of payment, on which the said commercial transaction has been entered into. In this view of the matter, learned Departmental Representative's reliance on Aztec decision (supra) is of no assistance to the case of the revenue. The international transaction is exports of goods which been benchmarked on TNMM basis and which is duly accepted by the TPO. In view of these discussions, and respectfully following the decision of the coordinate bench in assessee's o .....

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nterest on delayed realization of debts is not taken into account in computation of the PLI, we can only say that it proceeds on the fallacious assumption that interest income is not taken into account in computation of profit before interest and taxes. The profit before tax and interest (PBIT) so computed takes into account interest income because, on the given facts, it is in the nature of other income which is duly included in the PBIT figure. It is only interest expenditure which is not take .....

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is an interest income of the finance and banking companies, to be included in the other income which is taken into account for computing PBIT (i.e. profit before interest and taxes). The presumption therefore is that the accounts are drawn up as per the statutory requirements, and the exclusions from other income are specifically discussed on the facts of each case, and as such constitute integral part of the transfer pricing documentation. There is nothing on record to show these exclusions. 1 .....

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ons than the rule. The apprehensions of the learned DR are purely hypothetical and, therefore, devoid of legally sustainable merits. 17. In view of these discussions, as also bearing in mind entirety of the case, we are of the considered view that no ALP adjustments can be made, on the facts of this case, in respect of delay in realization of sale proceeds. Such being our conclusions, we also see no need to address ourselves to the specific factual arguments advanced by the learned counsel. In e .....

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ct of the matter for which the impugned ALP adjustment must be deleted. 20. In order to explain this line of reasoning, a few material factual developments and the legal analysis will have to be taken note of. We have noted that everything hinges on application of Explanation to Section 92B, vide Finance Act 2012, though with retrospective effect from 1st April 2002. This Explanation provides as follows: Explanation*: - For the removal of doubts, it is hereby clarified that - (*inserted by the F .....

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ing land use, copyrights, patents, trademarks, licences, franchises, customer list, marketing channel, brand, commercial secret, know -how, industrial property right, exterior design or practical and new design or any other business or commercial rights of similar nature; (c) capital financing, including any type of long -term or short -term borrowing, lending or guarantee, purchase or sale of marketable securities or any type of advance, payments or deferred payment or receivable or any other d .....

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ises at the time of the transaction or at any future date; (ii) the expression "intangible property" shall include - (a) marketing related intangible assets, such as, trademarks, trade names, brand names, logos; (b) technology related intangible assets, such as, process patents, patent applications, technical documentation such as laboratory notebooks, technical know -how; (c) artistic related intangible assets, such as, literary works and copyrights, musical compositions, copyrights, .....

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g) contract related intangible assets, such as, favourable supplier, contracts, licence agreements, franchise agreements, non -compete agreements; (h) human capital related intangible assets, such as, trained and organised work force, employment agreements, union contracts; (i) location related intangible assets, such as, leasehold interest, mineral exploitation rights, easements, air rights, water rights; (j) goodwill related intangible assets, such as, institutional goodwill, professional prac .....

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2011) 139 TTJ 214 (Bom)] and speaking through one of us, had observed as follows: 4. It is only elementary, in terms of the provisions of Section 92, any income arising from an international transaction has to be computed having regard to the arm's length price (ALP), and that this exercise includes the allowance for any expense or interest arising from an international transaction as well. That is the only provisions under which ALP adjustments can be made. In other words, therefore, arm .....

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fits, incomes, losses or assets of such enterprises" as also transaction in the nature of cost or expense sharing arrangement. The question that we must address ourselves to is whether a continuing debit balance constitutes a 'transaction' in terms of the provisions of Section 92 B. 5. A continuing debit balance, in our humble understanding, is not an international transaction per se, but is a result of the international transaction. In plain words, a continuing debit balance only r .....

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ansaction itself, as a result of which the debit balance has come into existence, and the terms and conditions, including terms of payment, on which the said commercial transaction has been entered into. The payment terms are an integral part of any commercial transaction, and the transaction value takes into account the terms of payment, such as permissible credit period, as well. The residuary clause in the definition of 'international transaction', i.e. any other transaction having a .....

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es, does not amount to an international transaction under section 92 B in respect of which ALP adjustments can be made. The factum of payment has to be considered vis-a-vis terms of payment set out in the transaction arrangement, and not in isolation with the commercial terms on which transaction in respect of which payment is, according to the revenue authorities, delayed. 22. We have noted the learned Departmental Representative s contention that the above decision is no longer good in law sin .....

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er the amended provision of Section 92B(1) of the Act . 23. However, when we perused Hon ble Bombay High Court s judgment referred to in this coordinate bench s order, we found the factual position to be slightly, but very materially, different. 24. The relevant question before Their Lordships, in the said case and as set out at page 2 of this judgment, was (c) whether, on the facts and circumstances of the case and in law, the Tribunal did not err in holding that the loss suffered by the assess .....

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doing so, at page 3-4 of the judgment, Their Lordships observed as follows: 2. So far as question (c) is concerned, counsel for the parties state that in view of the amendment to Section 92B(1) of the Income Tax Act, 1961 ('Act' for short) by Finance Act, 2012 with retrospective effect from 1st April 2002, the question as framed may be restored to the file of the Tribunal for fresh decision in light on the amendment. Accordingly, this issue is remitted to the file of the Tribunal for fre .....

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Tribunal. 26. In any event, to this extent, this judgment does not involve an adjudication on a legal issue as it is a result of consensus of the parties. When both the parties before Their Lordships agreed, and so stated before Their Lordships, to let the matter be restored to the file of the Tribunal, there could not have been, and there was no, adjudication on any legal issue. 27. It is for this reason that the said decision of the Pune bench of the Tribunal, relied upon by the learned Depart .....

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ubts, it is hereby clarified that (c) capital financing, including any type of long -term or short -term borrowing, lending or guarantee, purchase or sale of marketable securities or any type of advance, payments or deferred payment or receivable or any other debt arising during the course of business . In plain words, this amendment inter alia implies that capital financing of any type, including by way of deferred payment or receivable or any other debt arising during the course of business wi .....

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d to be retrospective but then the question really is whether just stating the law to be retrospective will make it retrospective in effect. 30. The fact that judicial precedents, prior to the insertion of Explanation to Section 92B, held that a continuing debit balance, on a standalone basis, does not constitute an international transaction required to be benchmarked assumes considerable significance in the light of a new judicial development that we will deal with in a short while now. In the .....

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forum or from so amending the law, with prospective effect, that there is no ambiguity about the intent of legislature and it is conveyed in unambiguous words. 31. Nullifying a judicial interpretation though legislative amendment, much as many of us may abhor it, is not too uncommon an occurrence. Of course, when legislature has to take an extreme measure to nullifying the impact of a judicial ruling in taxation, it is the time for, at least on a theoretical note, introspection for the draftsman .....

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while, for that approach. There is no dearth of examples on this aspect of the matter. Take for example, the amendment to Section 263 by the Finance Act, 1961. In many judicial precedents, [such as in the case of CIT Vs Sunbeam Auto Limited (332 ITR 167) wherein it was held that Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate t .....

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e invoked in the cases where the order is passed without making inquiries or verification which should have been made , all ratio of all these decisions was nullified. That, however, is done with prospective effect, i.e. with effect from 1st June 2015. As a matter of fact, it is a laudable policy of the present tax administration to stay away from making the retrospective amendments, and thus contribute to greater certainty and congenial business climate. Nothing evidences it better than this su .....

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Satellite BV [TS-64- HC -DEL (2016)], observed as follows: 30. Undoubtedly, the legislature is competent to amend a provision that operates retrospectively or prospectively. Nonetheless, when disputes as to their applicability arise in court, it is the actual substance of the amendment that determines its ultimate operation and not the bare language in which such amendment is couched…….. 36. A clarificatory amendment presumes the existence of a provision the language of which is o .....

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d to be given retrospective effect to as a clarificatory amendment, is in its true nature one that expands the scope of the section it seeks to clarify, and resultantly introduces new principles, upon which liabilities might arise. Such amendments though framed as clarificatory, are in fact transformative substantive amendments, and incapable of being given retrospective effect. …………………. 37. An important question, which arises in this context, is .....

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urt? The general position of the courts in this regard is where the purpose of a special interpretive statute is to correct a judicial interpretation of a prior law, which the legislature considers inaccurate, the effect is prospective. Any other result would make the legislature a court of last resort. United States v. Gilmore 8 Wall [(75 US) 330, 19L Ed 396 (1869)] Peony Park v. O Malley [223 F2d 668 (8th Cir 1955)]. It does not mean that the legislature does not have the power to override jud .....

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ecome entitled to be treated as clarificatory by the judicial forums as well. 35. Legislature may describe an amendment as clarificatory in nature, but a call will have to be taken by the judiciary whether it is indeed clarificatory or not. This determination, i.e. whether the amendment in indeed clarificatory or is the amendment to overcome a judicial precedent, assumes great significance because when it is found that the purpose of such interpretive statute, or clarificatory amendment, is corr .....

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er compliant with the norms set out in such anti abuse legislation. An anti-abuse legislation does not trigger the levy of taxes; it only tells you what behavior is acceptable or what is not acceptable. What triggers levy of taxes is non-compliance with the manner in which the anti-abuse regulations require the taxpayers to conduct their affairs. In that sense, all anti abuse legislations seek a certain degree of compliance with the norms set out therein. It is, therefore, only elementary that a .....

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tion defined under section 92B, assuming that it indeed does not- as learned Departmental Representative contends, this provision has already been judicially interpreted, and the matter rests there unless it is reversed by a higher judicial forum. However, if the 2012 amendment does increase the scope of international transaction under section 92B, as is our considered view, there is no way it could be implemented for the period prior to this law coming on the statute i.e. 28th May 2012. The law .....

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ossibilities, and the administration of law must adopt that general exception in the consideration of particular cases. [See : U.P.S.R.T.C. vs. Imtiaz Hussain 2006 (1) SCC 380, Shaikh Salim Haji Abdul Khayumsab vs. Kumar & Ors. 2006 (1) SCC 46, Mohammod Gazi vs. State of M.P. & Ors. 2000 (4) SCC 342 and Gursharan Singh vs. New Delhi Municipal Committee 1996 (2) SCC 459]. 39. It is for this reason that the Explanation to Section 92 B, though stated to be clarificatory and stated to be eff .....

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that it is stated to be retrospective, in the light of the aforesaid guidance of Hon ble Delhi High Court, would not alter the situation, and it can only be treated as prospective in effect i.e. with effect from 1st April 2012 onwards. 40. As we deal with this question, it is also relevant to consider whether this Tribunal can, while adjudicating on the appeals, tinker with the date, as set out in the statute, from which an amendment is effective. In our humble understanding, as a judicial forum .....

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es us to deviate from the specific words of the provisions of the statute in a particular manner, we have to do so. There is no escape from this call of duty. 41. There are a number of decisions in which our so tinkering with the specific words in the statute have been upheld, as long as this has been so done in accordance with the judicial principles and guidance in the judge made law. In the case of Rajeev Kumar Agarwal Vs ACIT [(2014) 249 ITD 363 (Agra)], insertion of second proviso to Sectio .....

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idered view that section 40(a)(ia) cannot be seen as intended to be a penal provision to punish the lapses of non deduction of tax at source from payments for expenditure- particularly when the recipients have taken into account income embedded in these payments, paid due taxes thereon and filed income tax returns in accordance with the law. As a corollary to this proposition, in our considered view, declining deduction in respect of expenditure relating to the payments of this nature cannot be .....

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primary justification for such a disallowance is that such a denial of deduction is to compensate for the loss of revenue by corresponding income not being taken into account in computation of taxable income in the hands of the recipients of the payments. Such a policy motivated deduction restrictions should, therefore, not come into play when an assessee is able to establish that there is no actual loss of revenue. This disallowance does deincentivize not deducting tax at source, when such tax .....

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able interpretation of law- as is the guidance from Hon ble Delhi High Court on interpretation of this legal provision, in our humble understanding, it could not be an intended consequence to disallow the expenditure, due to non deduction of tax at source, even in a situation in which corresponding income is brought to tax in the hands of the recipient. The scheme of Section 40(a)(ia), as we see it, is aimed at ensuring that an expenditure should not be allowed as deduction in the hands of an as .....

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ey existed prior to insertion of second proviso thereto, went much beyond the obvious intentions of the lawmakers and created undue hardships even in cases in which the assessee s tax withholding lapses did not result in any loss to the exchequer. Now that the legislature has been compassionate enough to cure these shortcomings of provision, and thus obviate the unintended hardships, such an amendment in law, in view of the well settled legal position to the effect that a curative amendment to a .....

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tion in respect of related payments, even when the corresponding income is duly brought to tax. That will be going much beyond the obvious intention of the section. Accordingly, we hold that the insertion of second proviso to Section 40(a)(ia) is declaratory and curative in nature and it has retrospective effect from 1st April, 2005, being the date from which sub clause (ia) of section 40(a) was inserted by the Finance (No. 2) Act, 2004. 42. While approving this approach, and upholding the decis .....

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