Case Law Details
Corteva Agriscience Services India Private Limited Vs ACIT (ITAT Hyderabad)
We straight away come to the assessee’s sole substantive grievance canvassed in the instant appeal challenging correctness of both the lower authorities’ action making arms length price adjustment of Rs.59,45,094/- in the assessment order going by S.B.I’s 14.45% interest rate; and that too, without adopting any segmental comparable in the assessee’s segment of business support services.
We next note with able assistance of both the parties that the Transfer Pricing Officer’s order dated 31.10.2016 in para 6.5 to 6.5.3 has relied on assessee’s alleged inter-company agreements executed with its associated enterprise only for determining the corresponding credit period in the business transactions as 30 days only. We thus make it clear that the learned lower authorities have not adopted any segmental comparable whilst arriving at the impugned adjustment.
Faced with this situation, we quote Tecnimont Icb Pvt Ltd., Mumbai Vs. ACIT (2012) 138 ITD 23 (Mumbai) and Sabic Innovative Plastic India Pvt Ltd Vs. DCIT (2013) 59 SOT 138 (Ahmedabad) holding that an associate enterprise itself would not to be taken as a comparable since lacking the independent nature of an uncontrolled transaction in forming hallmark of Chapter X of the Act. We thus delete the impugned arms length price adjustment on receivables for this precise reason alone.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This assessee’s appeal for A.Y 2013-14 arises from the Commissioner of Income Tax (Appeals) – 5, Hyderabad’s order dated 31.10.2017 in case No.0520/2016-17/CIT(A)-5 involving proceedings under section 143(3) r.w.s. 92CA(3) of Income Tax Act, 1961 (in short, “the Act”).
Heard both sides. Case file perused.
2. We straight away come to the assessee’s sole substantive grievance canvassed in the instant appeal challenging correctness of both the lower authorities’ action making arms length price adjustment of Rs.59,45,094/- in the assessment order going by S.B.I’s 14.45% interest rate; and that too, without adopting any segmental comparable in the assessee’s segment of business support services.
3. We next note with able assistance of both the parties that the Transfer Pricing Officer’s order dated 31.10.2016 in para 6.5 to 6.5.3 has relied on assessee’s alleged inter-company agreements executed with its associated enterprise only for determining the corresponding credit period in the business transactions as 30 days only. We thus make it clear that the learned lower authorities have not adopted any segmental comparable whilst arriving at the impugned adjustment.
4. Faced with this situation, we quote Tecnimont Icb Pvt Ltd., Mumbai Vs. ACIT (2012) 138 ITD 23 (Mumbai) and Sabic Innovative Plastic India Pvt Ltd Vs. DCIT (2013) 59 SOT 138 (Ahmedabad) holding that an associate enterprise itself would not to be taken as a comparable since lacking the independent nature of an uncontrolled transaction in forming hallmark of Chapter X of the Act. We thus delete the impugned arms length price adjustment on receivables for this precise reason alone.
5. All the other pleadings on merits are rendered infructuous.
6. This assessee’s appeal is allowed in above terms.
Order pronounced in the Open Court on 26th November, 2021.
