Lubrizol Advanced Materials India Pvt. Ltd. Vs Assessment Unit (Income Tax Department) (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, considered the assessee’s appeal against the assessment order dated 30.12.2022 passed under Sections 143(3), 144B and 260 of the Income Tax Act for Assessment Year 2017-18. The assessee primarily challenged the assessment order on the ground that it was barred by limitation under Section 144C(13). Other grounds related to transfer pricing adjustments concerning marketing support services, selection of comparables, benchmarking methodology, and project management services.
Background of the Case
The assessee, engaged in manufacturing Cassia Gum Powder and providing independent marketing support services to its Associated Enterprises (AEs), filed its return declaring a loss of Rs.12.49 crore. The case was selected for scrutiny and referred to the Transfer Pricing Officer (TPO). The TPO proposed transfer pricing adjustments, following which a draft assessment order under Section 144C was issued on 22.04.2021. The assessee filed objections before the Dispute Resolution Panel (DRP) on 29.05.2021.
Before the DRP proceedings concluded, the Assessing Officer passed an assessment order on 28.05.2021. The assessee challenged this order before the Bombay High Court, which, by order dated 29.10.2021, quashed the assessment because it had been passed while the assessee’s objections before the DRP were still pending. Thereafter, the DRP issued its directions on 28.01.2022. The assessee subsequently contended that the final assessment order should have been completed within the period prescribed under Section 144C(13).
