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

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I-T - Assessee can increase losses by claiming provision for warranties as per note no 11 of audited financial statements: ITAT (See Breaking News)

I-T -Denial of Foreign Tax Credit solely due to delayed filing of Form 67 is not tenable: ITAT (See Breaking News)

INTL - Denial of Foreign Tax Credit solely based on a clerical & unintentional error in Form 67 unsustainable, considering that technical errors cannot be used to defeat substantive claims: ITAT (See Breaking News)

I-T - Profits derived from transportation of passengers under code sharing arrangement is to be treated as profits from operation of aircrafts: ITAT (See Breaking News)

TP- ICDS-I principles take precedence over Ind-AS, requiring use of cost price or acquisition cost of investments: ITAT (See Breaking News)

TP - If final assessment order passed by AO u/s 143(3) r.w.s. 144C(13) r.w.s. 144B is beyond upper time limit provided u/s 153(1) and Section 153(4), then said order is beyond limitation period: ITAT (See Breaking News)

I-T - Attribution of revenue to a Permanent Establishment does not limit deduction of expenses incurred to earn that revenue: HC (See Breaking News)

I-T - Assessee's statutory right to have objections adjudicated by DRP u/s 144C cannot be defeated by bona fide procedural error, such as filing objections with incorrect AO: HC (See Breaking News)

I-T - Where assessee, eligible u/s 144C has filed objections to draft assessment order before DRP, AO cannot lawfully pass final assessment order: HC (See Breaking News)

I-T - Authority deciding applications u/s 197 is obligated to decide as per provisions of Income Tax Act, and with due regard to treaties between countries, without being influenced by revenue targets: HC (See Breaking News)

I-T - If non-resident's income from mineral oil exploration activities qualifies as FTS or Royalty and is connected to Permanent Establishment in India, it must be taxed u/s 44DA, which overrides Section 44BB: HC (See Breaking News)

TP - Failure of TPO to supply copies of agreements that form basis of its findings constitutes violation of principles of natural justice: HC (See Breaking News)

Services trade expands modesty in Q4 of OECD Area (See TII Brief)

I-T - If operation of airline services is exempt from taxation under relevant DTAA & Income Tax Act, and if there is no outstanding tax demand, competent authority is required to issue NIL certificate u/s 197 for such exempt income: HC (See Breaking News)

I-T - Scheme of Section 144C is designed to protect the principles of natural justice and that administrative mechanisms should be put in place to ensure that objections are duly communicated to the AO: HC (See Breaking News)

I-T - Objective of Sec 197 is to ensure that where transaction is not taxable, tax is not deducted, thereby protecting assessee's cash flow and preventing Revenue from being burdened with interest on refunds: HC (See Breaking News)

DTAA - A Permanent Establishment is to be treated as distinct & separate enterprise & all expenses attributable to it must be allowed, in absence of any specific restriction in DTAA: ITAT (See Breaking News)

TP - Time limit for completion of assessment prescribed u/s 153 is definitive outer limit that must be adhered to: 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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