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

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I-T - Section 244A interest is not taxable at NIL under MFN clause importing India-US DTAA benefit: ITAT (See Breaking News)

TP - Reference u/s 92CA(1) is transaction-specific and does not confer upon TPO a general jurisdiction to determine assessee's taxable income or applicability of treaty provisions: ITAT (See Breaking News)

I-T - Territorial jurisdiction is governed by location of AO who passed assessment order - cannot be conferred based on situs of First Appellate Authority: ITAT (See Breaking News)

TP - Notional interest adjustment on receivables is impermissible where receivables have not become overdue within relevant accounting period: ITAT (See Breaking News)

TP - Assessee is entitled to challenge comparable before DRP even if it accepts the same before TPO - comparability is to be determined in keeping with statutory requirements & relevant FAR analysis: ITAT (See Breaking News)

TP - Rate charged by State Electricity Board to industrial consumer should be taken as market value for transfer of electricity from eligible unit to non-eligible unit: ITAT (See Breaking News)

TP - TPO cannot reject assessee's selection of AE as tested party for export transactions and substituting GPL India as tested party: ITAT (See Breaking News)

I-T - Interest received from and paid to overseas head office and branches is not taxable at hands of PE applying doctrine of mutuality: ITAT (See Breaking News)

I-T - Mere fact that for limited purpose of attribution of profits under DTAA, a Permanent Establishment is treated as separate enterprise, does not alter fundamental legal position that Head Office and branch continue to constitute same juridical person: ITAT (See Breaking News)

TP - Interest rate on intra-group loans should not be benchmarked using CUP method: ITAT (See Breaking News)

TP - Mere attribution of percentages to functions, assets and risks, without reliable basis for quantifying respective economic contributions, cannot, by itself, establish ALP of licence fees: ITAT (See Breaking News)

TP - If assessee has filed financials of AEs to establish that payment received from assessee were subjected to taxation in their respective jurisdiction, benefit test has no relevance in determining ALP: ITAT (See Breaking News)

TP - Notional interest adjustment on debt-free company is not sustainable: ITAT (See Breaking News)

TP - Working capital adjustment, foreign exchange fluctuation adjustment, and capacity utilization adjustment, shall be applied to international transactions: ITAT (See Breaking News)

TP - Royalty payment made by assessee to its AE cannot be subjected to TP adjustment when royalty is not embedded in import price: ITAT (See Breaking News)

TP - Penalty u/s 271BA cannot be sustained where foundational provision, namely section 92BA(i), is already omitted when penalty proceedings were initiated & the penalty order was passed: ITAT (See Breaking News)

I-T - Services rendered by individual based on his personal expertise, market knowledge & industry experience cannot automatically be characterised as FTS just because they have consultancy attributes: ITAT (See Breaking News)

DTAA - Borrowed services fees does not satisfy 'make available' requirement under Article 13(4) of India-UK DTAA: ITAT (See Breaking News)

I-T - Profits attributable to non-UK resident partners of UK partnership firm providing legal services in India cannot be taxed as Fees for Technical Services u/s 9(1)(vii): 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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