• CBDT inserts Rule 3B in the Income-tax Rules for valuation of perquisite under Sec. 17(2)(viia); will come into effect from 1 April 2021;
• Prescribes formula for calculation of annual accretion by way of interest, dividend or any other amount of similar nature to the balance or to the credit of the fund or scheme on the amount contributed by the employer to:
      (a) in a recognised provident fund;
      (b) in the scheme referred to in sub-section (1) of section 80CCD; and
      (c) in an approved superannuation fund.
• TP= (PC/2)*R + (PC1+ TP1)*R

• The Assessee was a NR in India for last 30 years. During the year under consideration, the Assessee made investments (purchase of properties) through remittance received from his foreign Bank account. 
• The AO held the investments to be unexplained cash credits and made addition u/s 68/69 of the Act disregarding Assessee’s submission that investment was made from the sale proceeds of gold bars in Dubai and out of maturity proceeds of FDs of company owned by assessee in Dubai.
• ITAT explains that the question of assessing such remittance to tax arises only when there is no evidence to show that the amounts are in fact remittances from abroad. In this case there was ample evidence in the form of confirmation letter from Bank of Baroda in Dubai w.r.t maturity proceeds of FDs, invoices supporting sale of gold bars in Dubai and copies of cheque issued in favour of assessee.
• ITAT held that the remittance received from Assessee’s bank account in Dubai to his SBI account in Goa or remittance to the vendors of the properties is neither income received or deemed to be received in India nor was accrued or arisen or deemed to be accrued or arisen in India, therefore, the question of chargeability to income tax in India does not arise.

• The assessee is an individual and is engaged in the business as builder and developer.
• During AY 2014-15, the assessee had sold eight flats at loss. The AO during assessment added back the differential amount (Stamp Value – Sale Consideration) of ₹ 6,83,500/- u/s 43CA.
• In the said case, CIT(A) had accepted that Section 43CA was not applicable to the case as section 43CA was introduced into the statute by Finance Act, 2013 w.e.f. 1 April 2014.
• However, the CIT(A) had made certain additions on account of differences between sale consideration and stamp duty value on various other grounds such as loss of assessee in respect of housing project, doubting the genuineness of expenditure incurred and sale of other flats at higher rates.
• The ITAT states that CIT(A) has gone into completely new arena by introducing a new source of disallowance during appellate proceedings since the same was never a part of assessment proceedings.
• Also, ITAT opines that “Without making any enquiry or bringing material on record to establish the fact that the assessee has received any amount over and above the declared sale consideration, no addition could have been made when it is accepted that section 43CA meant for such deemed addition, is not applicable to the subject transaction.”

Pune ITAT lays twin conditions to classify payment as ‘reimbursement’, for TDS u/s 195

Facts of the case:

• The Assessee, BYK Asia Pacific Pte. Limited, a tax resident of Singapore operates through branches in many countries including Indian BO, which is PE of Singapore HO.
• Assessee provides technical support services to its German Parent company, and the service fees is reimbursed by Singapore HO with 10% markup, taxed in India. During the course, Indian BO reimbursed its HO for expenses incurred on its behalf without TDS.

Conclusion:

• The ITAT holds that 2 fundamental conditions must co-exist in order to fall within the domain of ‘reimbursement’, i.e.,
         ♦ one-to-one direct correlation between the outgo and inflow must be established,
         ♦ receipt and payment must be of identical amount;

• ITAT remarks that “receipt of a fixed amount, which may be more or less than the actual outgo, cannot be designated as reimbursement” and allows deduction of expenses towards IT, seminar, training, printing and staff welfare to assessee.

• Vide Notification No. G.S.R. 162(E) [NO. 13/2021/ F. NO. 142/15/2015-TPL] Dated 09 March 2021-  CBDT amends Rule 10V for computation of remuneration payable to fund manager u/s 9A by including two addition proviso.
• Vide instruction F. No. 414/132/2018-IT (INV.I)(PART I) Dated 9 March  2021- CBDT issues FAQs on general action required to be taken in cases where income escaping assessment pertains to assessment years 2013-14 to 2017-18.
• Vide Letter to AO dated 12 March 2021: CBDT issues certain instruction regarding to selection of cases for issue of notice for reopening of assessment u/s 148. This is clarification to the CBDT’s letter dated 4 March 2021.
• For around 2.68 lakh IT forms, UDIN’s have not been uploaded by Chartered Accountants on the IT portal. In order to mitigate the likely hardships that would be faced by the taxpayers due to non-compliance, all the missed UDINs between the period 1 February 2019 to 10 March 2021 can now be generated upto 31 March 2021. For the documents signed from 11 March  2021 onwards, the original guidance for generation of UDIN, i.e., within 15 days of signing the documents will be applicable.
• Hon’ble Delhi ITAT in the case of Louis Dreyfus Commodities India Pvt Ltd Vs DCIT, Circle 4 (1) Quashes TP-order passed beyond 60-day limit u/s 92CA(3A) r.w.s.153(1) as it is barred by limitation- follows Hon’ble High Court ruling in case of Pfizer Healthcare.
• In response to various representations received by CBDT seeking clarification completion of pending assessment under Wealth Tax Act, 1957 in faceless manner, CBDT clarifies that notification introducing faceless assessments is applicable only for proceedings under Income Tax Act.
• The pending assessment under Wealth Tax Act, 1957 are to be completed by jurisdictional AOs through e-proceedings module.
• The Income Tax Department has issued refunds over ₹2.14 trillions to over 22.4 million taxpayers so far, this fiscal
• OECD publishes Arbitration Profiles of 30 countries adopting arbitration regime under Part VI of MLI
• Finance Bill 2021 becomes Act, after receiving President’s assent on 28 March 2021. Earlier the Bill was approved in the Parliament, after Lok Sabha passed it on 23 March 2021 while Rajya Sabha assented to it immediately on the next day i.e. on 24 March 2021
• CBDT (Foreign Tax & Tax Research Division) publishes International Tax Bulletin for March 2021
• Shri Anurag Singh Thakur, Union Minister of State for Finance & Corporate Affairs, in his response to a Parliamentary questions revealed the following:
• Direct Taxes (as on 31 March 2020)