BO, LO & PO by foreign law firms - RBI issues fresh instruction

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I-T - Payment for voice termination services is not taxable as royalty, if there is no transfer of intellectual property rights, no use or right to use equipment or process by customer, and no secret process: ITAT (See Breaking News)

INTL - Sections 144C and 153 are interdependent & overall time limit prescribed u/s 153 applies to entire assessment proceedings, including DRP directions & passing of final order: ITAT (See Breaking News)

TP - Transfer pricing adjustment on account of ESOP/RSU is unsustainable as it was based on a notional & hypothetical cost not incurred by assessee : ITAT (See Breaking News)

I-T - If pursuant to court-approved amalgamation, cost of investment in shares of amalgamating company exceeds value of net assets taken over, such excess constitutes goodwill, eligible for depreciation u/s 32(1)(ii): ITAT (See Breaking News)

TP - AMP expenditure incurred by the assessee, which is the Indian arm of a foreign company, would not constitute international transactions: ITAT (See Breaking News)

TP - When computing notional interest on delayed realization of trade receivables arising from international transactions denominated in foreign currency, interest rate must be benchmarked against foreign currency rate: ITAT (See Breaking News)

TP - Outer time limit of 33 months in case of reference to TPO u/s 153 would not refer to draft order, but only to final order: ITAT (See Breaking News)

INTL - Assessment order erroneous where it allows deduction of belated deposit of employee's contribution to PF & ESI, given the same is expressly disallowed vide SC's judgment in Checkmate Services (P.) Ltd.: ITAT (See Breaking News)

INTL - For purpose of section 263, correctness of assessment order has to be examined w.r.t. the record as it exists at time of revision: ITAT (See Breaking News)

I-T - Time limits prescribed u/s 153 are applicable to assessments conducted under DRP route specified in section 144C: ITAT (See Breaking News)

I-T - Making an unsustainable claim does not per se amount to furnishing inaccurate particulars, so as to warrant imposing penalty u/s 271(1)(c) of the Act: ITAT (See Breaking News)

I-T - Time limit prescribed u/s 153 has to be adhered to and that both Section 144C and 153 are mutually inclusive and interdependent: ITAT (See Breaking News)

DTAA - Gains from trading in stock derivatives fall under Article 13(4) of DTAA & are taxable only in country of residence, i.e., Mauritius, and not in India: ITAT (See Breaking News)

I-T - Non-obstante clause in section 144C(13) imposes restriction on AO and denies him benefit of more expansive time limit available under section 153: ITAT (See Breaking News)

I-T - AO's failure to test computation under Rule 8D demonstrates case of lack of inquiry, making deeming provisions of Explanation 2, clause (a) to Sec 263 applicable: ITAT (See Breaking News)

I-T - Provisions of Section 144C and Section 153 are mutually inclusive, and non-obstante clause in Section 144C(13) does not extend primary limitation period set by Section 153: ITAT (See Breaking News)

I-T - Time limit for completing assessment for 'eligible assessee' under the Dispute Resolution Panel mechanism is governed by overarching provisions of Section 153: ITAT (See Breaking News)

I-T - Fundamental jurisdictional defect cannot be cured by procedural compliance with Section 148A or by exclusion of time available under other provisos to Section 149(1): ITAT (See Breaking News)

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BO, LO & PO by foreign law firms - RBI issues fresh instruction By TII News Services Nov 23, 2020 , New Delhi
A.P. (DIR Series) CIRCULAR NO 07/RBI, Dated: November 23, 2020 To, All Category - I Authorized Dealer Banks Establishment of Branch Office (BO) / Liaison Office (LO) / Project Office (PO) or any other place of business in India by foreign law firms Attention of the Authorised Dealer (AD - Category I) banks is invited to AP (DIR Series) Circular No. 23 dated October 29, 2015, on the above issue advising that no fresh permissions/ renewal of permission shall be granted by the Reserve Bank/AD Category-I banks to any foreign law firm for opening of Liaison Office in India, till the policy is reviewed based on, among others, final disposal of the matter by the Hon'ble Supreme Court. 2. The Hon'ble Supreme Court has while disposing of the case, held that advocates enrolled under the Advocates Act, 1961 alone are entitled to practice law in India and that foreign law firms/companies or foreign lawyers cannot practice profession of law in India. As such, foreign law firms/companies or foreign lawyers or any other person resident outside India, are not permitted to establish any branch office, project office, liaison office or other place of business in India for the purpose of practicing legal profession. Accordingly, AD Category - I banks are directed not to grant any approval to any branch office, project office, liaison office or other place of business in India under FEMA for the purpose of practicing legal profession in India. Further, they shall bring to the notice of the Reserve Bank in case any such violation of the provisions of the Advocates Act comes to their notice. 3. All other provisions of the BO/LO/PO policy shall remain unchanged. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers. 4. The Master Direction No. 10 dated January 1, 2016 is being updated simultaneously to reflect the changes. 5. The directions contained in this circular have been issued under Section 10(4) and 11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law. [RBI/2020-21/69] (Ravinder Singh Amar) Chief General Manager

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