Direct Tax Weekly Flashback for the period 16 to 22 February 2025.
Table of Contents
Delhi High Court
Assurances Not Evidence Of Nokia OY Using NIPL As Vehicle For Its Own Enterprise: Delhi High Court
Case Title: The Commissioner Of Income Tax – International Taxation -2 V/S Nokia Network Oy
The Delhi High Court has held that assurances were clearly not liable to be viewed as being evidence of Nokia OY using Nokia India Private Limited (NIPL) as a vehicle for its own enterprise.
The bench of Justice Yashwant Varma and Justice Ravinder Dudeja has observed that a parent or a holding company would invariably be expected to have an interest and concern in the working of an overseas subsidiary. This essentially represents its right of oversight, supervision and protection of shareholder interest. However, the exercise of those powers does not denude the subsidiary of its independent economic existence. As Article 5(8) explains, the mere fact that the enterprise is a subsidiary of another would not in itself be sufficient to recognise it as a PE.
Delhi High Court Quashes Reassessment Proceedings Against Maruti Suzuki
Case Title: Maruti Suzuki India Ltd. Versus DCIT
The Delhi High Court has quashed reassessment proceedings against Maruti Suzuki.
The bench of Justice Yashwant Varma and Justice Ravinder Dudeja has observed that it is impossible to hold that the AO was unaware of remittances made to SMC, related party transactions and details of TDS deposited. The record which has been analysed by us leads us to the inevitable conclusion that it would be wholly incorrect to hold that the AO was not cognizant of the relevant facts, the different heads of income and expenditure involved, the remittances made to SMC as well as the issue of short and long term capital gains.
Bombay High Court
Reassessment Can’t Be Invoked On The Basis Of Search Action: Bombay High Court
Case Title: Sejal Jewellary & Anr v/s Union of India & Ors.
The Bombay High Court has held that the reassessment cannot be invoked on the basis of search action.
Bombay High Court Quashes Income Tax Advisory Denying BCCI Tax Exemption, Cancelling Registration
Case Title: The Board of Control for Cricket in India Versus ACIT
In a significant relief for the Board of Control for Cricket in India (BCCI), the Bombay High Court has set aside an Income Tax Department communication that questioned the board’s tax-exempt status.
A bench comprising Justices M.S. Sonak and Jitendra Jain found that the ITAT had overstepped its jurisdiction by commenting on the case’s merits after declaring BCCI’s appeal non-maintainable.
This Is Why Bombay High Court Quashes Income Tax Reassessment Against Indusind Media
Case Title: M/s. Indusind Media & Communications Ltd. Versus The Assistant Commissioner of Income Tax
The Bombay High Court has quashed the income tax reassessment against Indusind Media.
The bench of Justice M.S. Sonak and Justice Jitendra Jain has observed that even in case of reopening within 4 years from end of the assessment year if the issue was examined in the course of the assessment proceedings then no reopening of assessment can be done since the same would amount to change of opinion.
Karnataka High Court
Urban Ladder Home Décor Not Liable To TDS On Remittances To Facebook, Amazon Web-Services For Advertisements: Karnataka High Court
Case Title: CIT Versus Urban Ladder Home Décor Solutions Pvt. Ltd
The Karnataka High Court has held that Urban Ladder Home Décor is not liable to TDS on remittances to Facebook, Amazon Web-Services for advertisements.
The bench of Justice V Kameswar Rao and Justice S Rachaiah has observed that the facilities provided by the non-resident Companies are only enabling facilities which help a person to place his advertisement contents on the platform of Facebook or to use MailChimp facility effectively. In the case of Amazon, the payment is in the nature of rent payments for use of infrastructure facilities. The payments made to above three non-resident Companies do not fall within the meaning of ‘royalty’ as defined in DTAA.
