While the requirement of compliance with transfer pricing regulations by all the AEs involved in a transaction has been a subject matter of intense debate and practically, many foreign AEs do not comply with TP regulations in India, a recent ruling of a Special Bench of ITAT, Kolkata emphasises the requirement of compliance with Indian TP regulations by non-residents even where they do not receive any income because of their relationship with Indian AE.

Delhi High Court in a recent decision has held that the deduction under Section 80-IA(2A) for telecommunication companies is also available with respect to various ancillary income such as liquidated damages, interest, sale of directories and extra-ordinary items of income.

Recently, the Central Board of Direct Taxes notified the rules for granting of Foreign Tax Credit (FTC) to resident taxpayers on income earned in foreign jurisdiction.

While Section 9(1) (ii) creates a deeming fiction on what could be an accrual or deemed accrual in respect of salary received/receivable by a non- resident, there is no clear explanation in the Act with respect to amounts/income which has been received or deemed to have been received.

India entered into The Double Taxation Avoidance Agreement (‘DTAA’) with Mauritius on 24th August, 1982.

Last year, the Indian Government introduced a voluntary declaration of undisclosed foreign income and assets for resident taxpayers under the Black Money Act which met with limited success.

With the Finance Bill 2016, the penalty regime in income-tax law is proposed to undergo a major overhaul.

With the developed economies feeling the brunt of losing tax revenues due to tax planning, provisions relating to Transfer Pricing were introduced to ensure economic value add in every jurisdiction is adequately compensated.

CBDT recently notified a draft of guiding principles for determination of PoEM of a company. PoEM has been defined to be a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance, made.

Direct Tax Amicus for the month of December 2015 covers article titled ‘Situs of IP for taxing rights’. According to the author, States that want to extend their taxing power on IP holding companies should first have some understanding of the nature of IP rights.