Nokia India (P.) Ltd. v Addln CIT [2012] 22 taxmann.com 109 (Delhi – Trib.) Facts of the case Assessee incurred certain advertisement, marketing and promotion expenditure. The AO in order to determine the arm’s length price of international transaction with associated enterprise referred the matter to TPO u/s 93CA(3) of the act. The TPO passed an order u/s 92CA(3) of the Act, wherein he determined the arm’s length price on Advertisement, Marketing and Promotion (AMP) expenses amounting to Rs. 253,48,30,000.
Retrospective amendment
Letter [F.No.500/111/2009-FTD-1(Pt.)], dated 29-5-2012 The Finance Act 2012 has introduced certain clarificatory amendments in Section 2 clause (14), Section 2 clause (47), Section 9 and Section 195, of the Income Tax Act, 1961 (“Act”), with retrospective effect from 01.04.1962 or 01.04.1976, whereby meaning of various terms used in these sections have been clarified in order to remove any doubt regarding their interpretations. 2. These amendments have been introduced retrospectively in order to clarify the legislative intent and state the position of law from the date of coming into effect of these sections in the Act. 3. Doubts have been raised in various quarters about the implication of these amendments on the assessments that have already been completed and attained finality. 4. The Board, after due consideration, hereby directs that in case where assessment proceedings have been completed under section 143(3) of the Act, before the first day of April, 2012, and no notice for reassessment has been issued prior to that date; then such cases shall not be reopened under Section 147/148 of the Act on account of the abovementioned clarificatory amendments introduced by the Finance Act, 2012. However, assessment or any other order which stand validated due to the said clarificatory amendments in the Finance Act 2012 would of course be enforced. 5. This may be brought to the notice of all officers in your region immediately.
No reopening for retrospective amendments in Finance Act, 2012 – CBDT
B4U International Holdings Ltd. v DCIT I.T.A.No. 3326/Mum/2006 (Mum ITAT) Finance Act, 2012 introduced a retrospective amendment in the definition of the term ‘royalty’ by inserting Explanation 4 to 6 in s. 9(1)(vi) with retrospective effect from 1.6.1976. The same reads as under: