Court: Supreme Court
Citation: Coca Cola India Inc. Vs. ACIT & Ors. (SC) [Appeal (Civil) No. 646/200)] (Judgement dated 25 November 2010)
Brief : Supreme Court directs that since, foundational facts could not be established by way of writ petition, the taxpayer should be relegated to adopt proceedings before various Income-tax authorities. Thus, the Supreme Court has confirmed the decision of the Punjab and Haryana High Court allowing Assessing Officer / Transfer Pricing Officer to continue with the reassessment proceedings.
The Hon’ble Supreme Court (Supreme Court in the context of Transfer Pricing Provisions of Section 92 to 92F of the Income Tax Act, 1961 (the Act), has directed Assessing Officer (AO)/ Transfer Pricing Officer (TPO) to expeditiously hear and dispose of pending proceedings and to decide independently on the merits of case, uninfluenced by the observations of the Punjab and Haryana High Court (High Court).
The Apex Court has further ruled if the taxpayer is aggrieved by the order passed by AO/ TPO, it will have to exhaust the statutory remedy of appeal provided under the Act.
Background
• The taxpayer company is incorporated in USA and has a Branch Office (BO) in India (pursuant to obtaining permission from the Reserve Bank of India under Foreign Exchange Regulation Act, 1973 (FERA)) to render services to the Coca Cola Group of Companies in India.
• The taxpayer entered into a service agreement with Britco Foods Company Private Limited (Britco), an Indian company, under which taxpayer provided advisory services relating to advising, monitoring, and co-coordinating the activities of bottlers, in consideration for fees calculated on the basis of actual cost plus 5 percent.
• The Assessing Officer (AO), issued notices under Section 148 for assessment years 1999-2000 to 2001-02 for bringing into tax the escaped income. The reasons recorded for invoking provisions of Section 147 of the Act and issuance of notices under Section 148 of the Act, were:
