a) the amount of primary adjustment made in any previous year does not exceed INR one

crore; orb) the primary adjustment is made in respect

of an assessment year commencing on or st before the 1 April, 2016.

As amended in section 92CE (2), if there is an increase in the total income or reduction in the loss, the interest shall be calculated on the excess

money or part thereof, if it is not repatriated to India within the prescribed time limit.

However, without prejudice to 92CE (2), assesse

has an option to pay additional income tax at

the rate of 18%, on such excess money or part thereof which has not been repatriated to India within prescribed time limit and as an effect, he

shall not be required to make secondary adjustment and compute interest from the date of payment of such tax.

The taxes so paid by the assessee under section,

shall be treated as �nal payment of tax and-

a) No further credit shall be claimed by the assessee or by any other person in respect of

Further it is clari�ed that excess money or part

thereof may be repatriated from any of the associated enterprise of the assessee which is not a resident in India.

Section 92CE:

thPresented on July 5 , Indian Budget 2019 includes only a few proposals on cross-border taxation and transfer pricing. These proposals have been made with regard to

section 92D, 92CE, 92CD and 286(9)(a) of the Income Tax Act, 1961.

With effect from FY 2018-19, designated

constituent entity [as de�ned in section 286(9)(d)] thshall �le requisite form 3CEAA by 30 November

of the relevant assessment year, even when there

is no international transaction undertaken by such designated constituent entity.

As amended in section 92CE (1) (iii), the assessee shall make a secondary adjustment, if primary adjustment to transfer price is determined by an advance pricing agreement entered into by the

stassessee under section 92CC, on or after 1 April

2017.

The conditions to be ful�lled for the applicability

of secondar y adjustment are alternate conditions i .e. section 92CE shall not be applicable if-

thOn 5 July 2019, �rst female Finance Minister of India, Mrs. Nirmala Sitharaman presented the budget of the newly re-elected government for FY 2019-20. The focus of the budget was on the rural economy and Make in India, while limited proposals appear to have been made to increase disposable income and increase consumption.

Section 92D:

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in Budget 2019

August 2019

1

Proposals onCROSS BORDER TRANSACTIONS

Section 286(9)(a):

For instance, if the accounting year followed by ththe parent entity of XYZ Ltd. is year ended 30

December 20XX, the same shall be the accounting year for XYZ Ltd.

It is clari�ed that where an Indian company is the 'alternate reporting entity', the accounting year

for constituent entity shall be construed as

followed by the ultimate parent entity i.e. accounting year shall always be the accounting year of the ultimate parent entity where it resides.

This amendment has withdrawn the power of Assessing Officer to assess, reassess or re-compute the total income of the assessee.

s tAs amended in section 92CD (3), w.e.f. 1 S eptember 2019, where an assessment/ reassessment has already been completed and modi�ed return of income has been �led by the

assessee, the Assessing Officer shall only pass an

order to modify the total income of the relevant assessment year, having regard to and in accordance with the Advance Pricing Agreement.

Section 92CD:

b) No deduction under any other provisions of this Act shall be allowed to the assessee in

respect of the amount or part thereof on which

tax has been paid.

the amount of tax so paid; and

2

4

TAXATION TIMES

CrossBorderTransactions

3

BRAND

Ma�er before the Authority Was the ITAT jus�fied in trea�ng the payments

as men�oned aforesaid are liable to TDS under

Considering the nature of the services described and

documents brought on record, the CIT(A) and the

Tribunal concluded that the expenditure incurred are

merely clerical services and are neither managerial or

technical in nature. Hence, such payments were liable

to TDS under s. 194C of the Act. The Revenue has preferred an appeal before the

Hon'ble High Court against the order of the ITAT.

event management expenses

1The taxpayer is an insurance company and has made

the following payments :

Case Walkthrough

data storage charges

The taxpayer deducted TDS under s. 194C of the Income

Tax Act (hereina�er referred to as the “Act”). The

Assessing Officer (“AO”) held that these payments were

in the nature of managerial and technical services and

hence payments ought to be deducted under s. 194J of

the Act.

outsourcing expenses such as processing

charges, call center opera�ons and business

services etc.

The Hon'ble High Court observed that

considering the nature of services rendered

i.e storage of data, scanning of documents,

data processing charges etc., these were

clerical services of repe��ve nature of work

and payments were neither for managerial

nor for technical services. Having perused

the documents on record, and looking at the

nature of services rendered, there are no

managerial or technical services involved.

The work outsourced was clerical in nature.

Therefore, TDS need not be deducted under

s. 194J of the Act.

s. 194C of the Act?Decision

In regards the event management fee paid by

the company, the CIT(A) and the Tribunal

have noted that the taxpayer had arranged a

conference at Agra. The payments were

e s s e n � a l l y f o r d o m e s � c � c ke � n g ,

reimbursing hotel expenditure, tour leader

expenses. Such services were essen�ally in

the nature of a travel agent who had

arranged the �cket booking and hotel

facili�es. Accordingly, the payments were

not for any technical services rendered by

the taxpayer.

1 CIT V/s Reliance Life Insurance Co. Ltd. (2019) 106 taxmann.com 400 (Bombay)

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“”

The Hon'ble Bombay High Court in a recent decision has

upheld that payments made towards storage of data, scanning of

documents, processing charges, call centre operations etc. are

neither for technical services nor for managerial services. TDS

under s. 194C needs to be deducted on such payments made.

Recent Case Laws

4

Thus, the payments made towards data

storage charges, processing charges, call cener

opera�ons, travel agent expenses were liable

to deduc�on of TDS under s. 194C and not 194J

of the Act.

Case Wrap – Up From the decision of the High Court, it can be

reasonably held that incase of payments made

towards managerial or technical services,

these would come under the purview s. 194J.

For payments made towards repe��ve

nature and clerical work, these would be

liable to TDS deduc�on under s. 194C of the

Act.

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7

Upcoming compliances for Aug 2019

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7Aug 2019

th

7Aug 2019

th

Due date for furnishing challan –

cum statement in respect of TDS

deducted under s. 194 IA for the

month of July 2019.

July 2019

31Aug 2019

st

Annual return of income for the assessment year 2019-20 for all assessee other than (a)

corporate-assessee or (b) non-corporate assessee (whose books of account are required to be

audited) or (c) working partner of a firm whose accounts are required to be audited or (d) an

assessee who is required to furnish a report under .section 92E

Due date for deposit of Tax

deducted/collected for the month of

July, 2019.

Due Date for issue of TDS Certificate

for tax deducted under s. 194IA for

June 2019.

30Aug 2019

th

7Aug 2019

th

15Aug 2019

th

Due date for issue of TDS certificate

for tax deducted under s. 194IB for

June 2019.

Quarterly TDS certificate (in respect

of TDS deducted for payments other

than salary) for quarter ending June th30 , 2019.

Due date for furnishing challan –

cum statement in respect of TDS

deducted under s. 194 IB for the

month of July 2019.

30Aug 2019

th

31Aug 2019

st Due date for claiming foreign tax credit, upload statement of foreign income offered for tax for

the previous year 2018-19 and of foreign tax deducted or paid on such income in Form no. 67. st

(If the assessee is required to submit return of income on or before July 31 , 2019.)

8

Noti�cations & Circulars

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201, Tower S4, Phase II, Cyber City, Magarpatta Township, Hadapsar, Pune 411013 - Indiawww.uja.in

Due date to file Return of Income for persons other than Company and Tax Audit Return

The CBDT has extended the due date for filing of Individual Tax Returns for taxpayers eligible to file their ITR on or st st

before 31 July 2019. The due date has now been extended to 31 August.

h�ps://www.incometaxindiaefiling.gov.in/eFiling/Portal/Sta�cPDF_News/Order-for-extension-of-due-date-for_filing-of-ITRs-23-07-2019.pdf

Agreement between the Government of the Republic of India and the Government of the People's Republic of China.

thThe Central Government on 18 July 2019 notified the protocol amending the DTAA between India & China.

h�ps://www.incometaxindia.gov.in/communica�ons/no�fica�on/no�fica�on54_2019.pdf