Western India Regional Council of
The Institute of Chartered Accountants of India

Law Update Details

April 2019 CA. Bhavya Goyal

CBC report exchange between India and USA

The absence of an agreement between India and USA till now entailed a possibility of local filing of CbC Reports in India. However, a Bilateral Competent Authority Arrangement, along with an underlying Inter-Governmental Agreement, for exchange of CbC Reports between India and the USA has now been finalized. This would enable both the countries to exchange CbC Reports filed by the ultimate parent entities of International Groups in the respective jurisdictions, pertaining to the financial years commencing on or after 1st January, 2016. As a result, Indian constituent entities of international groups headquartered in USA, who have already filed CbC Reports in the USA, would not be required to do local filing of the CbC Reports of their international groups in India.

Transfer Pricing Litigation update

PMP Auto Components Pvt Ltd

Bombay High Court

Bombay HC upheld ITAT order deleting the TP adjustment of ` 2.58 crore on account of excess money paid to 100% subsidiary for acquiring its shares. HC noted that Revenue sought to bring the difference between actual investment (` 2.67 crore) & fair market value of shares (` 8.13 lakh) i.e. ` 2.58 crore to tax without being able to specify under which substantive provision would income arise. HC observed that the assessee had purchased the shares on capital account and held that “the issue arising here stands concluded by the decision of this Court in Vodafone”. (The view taken in Vodafone was also subsequently accepted by CBDT by issuance of CBDT Instruction 2/2015 dated January 29, 2015).


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