PCIT Vs Borgwarner Emissions Systems India Private Ltd. (Delhi High Court)
Delhi High Court held that Dispute Resolution Panel [DRP] cannot merely approve the conclusion of TPO without giving independent findings. Accordingly, writ dismissed as no substantial question arise in the petition.
Facts- The assessee company is engaged in manufacturing and marketing of Exhaust Gas Recirculation (EGR) System and its component for use by automotive industry with a registered office at New Delhi and a manufacturing facility at Manesar, Haryana.
The present appeal assails the decision of the Income Tax Appellate Tribunal (ITAT) dated 29.08.2024 wherein the assessee company had challenged the order dated 28.07.2022 pertaining to Assessment Year (AY) 2013-14 passed by AO. The issue that had arisen was with regard to the application of the Transfer Pricing provision as available under the Income Tax Act, 1961 (the Act).
The ITAT after considering the evidence provided and the records, held that the rejection of the claim, of the assessee wherein it had explained the need of entering into engineering agreement even after having entered into license agreement and availing TSS and BSS subsequently, was said to be done without proper inquiry and application of mind.
Conclusion- Having noted the submissions, we state in the facts of this case, the DRP, except approving the conclusion of the TPO had not given its findings on the same which was incumbent upon it. ITAT noted that from the order passed by Learned DRP, it transpires that one of the objections or contentions raised there on behalf of the assessee was that TPO had been unable to provide sufficient data of comparability in the case of TSS and BSS. In this regard, Learned DRP simply observed in the order that the same was well taken, but, surprisingly, at the same time opted to direct the TPO to consider said contention raised by the assessee.
