Tag: Legal jurisdiction

India vs SAP Labs India Private Ltd., April 2023, Supreme Court, Case No 8463 of 2022

India vs SAP Labs India Private Ltd., April 2023, Supreme Court, Case No 8463 of 2022

Under India’s Income Tax Act, an appeal against an order of an Income Tax Appellate Tribunal can be made to the High Court if it is satisfied that the case involves a “substantial question of law”. In the 2018 case of Softbrands India Private Ltd., the Karnataka High Court held that issues relating to the selection of comparable data and criteria for comparability in benchmarking for transfer pricing purposes do not raise a “substantial question of law”. In the 2023 case of SAP Labs India Private Ltd., the Supreme Court reversed this decision. According to the Supreme Court, it is always open to a High Court in an appeal involving transfer pricing issues to examine on a case-by-case basis whether the transfer pricing rules have been complied with or not and whether there is any perversity in the findings made by the Tribunal in determining the arm’s length price of controlled transactions. This means that the determination of arm’s length ... Read more
Malaysia vs Shell Services Asia Sdn Bhd, November 2019, High Court, Case No BA-25-68-08/2019

Malaysia vs Shell Services Asia Sdn Bhd, November 2019, High Court, Case No BA-25-68-08/2019

The principal activity of Shell Services Asia Sdn Bhd in Malaysia is to provide services to related companies within the Shell Group. For FY 2011 – 2016 the company was part of a contractual arrangement for the sharing of services and resources within the Shell Group as provided in a Cost Contribution Arrangement. The tax authorities conducted a transfer pricing audit, and based on the findings, issued a tax assessment, where the Cost Contribution Arrangement had instead been characterised as an intra-group services arrangement. As a result the taxable income was adjusted upwards by imposing a markup on the total costs of the services provided for fiscal years 2012, 2014, 2015 and 2016. Consequently, the company had to pay the additional taxes in the amount of: RM 3,474,978.44; RM 2,559,754.38; RM 7,096,984.69; RM 2,537,458.50; RM 15,669,176.01. The company did not agree with the proposal and an appeal for leave was filed with the High Court related to statutory powers/legal jurisdiction of the authorities ... Read more
India vs Softbrands India Private Ltd., June 2018, High Court, Case No ITA 536/2015

India vs Softbrands India Private Ltd., June 2018, High Court, Case No ITA 536/2015

In this case, an Indian High Court ruled that only substantial questions of law can be raised before the High Court. Issues relating to the selection of comparable data and criteria for comparability do not raise a “substantial question of law”. Excerpts “55. A substantial quantum of international trade and transactions depends upon the fair and quick judicial dispensation in such cases. Had it been a case of substantial question of interpretation of provisions of Double Taxation Avoidance Treaties (DTAA), interpretation of provisions of the Income Tax Act or Overriding Effect of the Treaties over the Domestic Legislations or the questions like Treaty Shopping, Base Erosion and Profit Shifting (BEPS), Transfer of Shares in Tax Havens (like in the case of Vodafone etc.), if based on relevant facts, such substantial questions of law could be raised before the High Court under Section 260-A of the Act, the Courts could have embarked upon such exercise of framing and answering such substantial ... Read more