Case Law Details
DCIT Vs AGS Customer Services India P. Ltd. (ITAT Pune)
Issue- Whether Ld. CIT(A) has erred in determining the ALP of international transaction related to Business Support Services in the light of terms and conditions of the Advance Pricing Agreement (APA) applicable to AY 2011-12 to AY 2015- 16, without appreciating that the terms and conditions set out in APA cannot be applied to the assessment year AY 2010-11 which is not a apart of APA.
CIT(A)’s admittedly appears to have gone by the assessee’s “advance pricing arrangement (APA)” dated 29.08.2016 with the CBDT adopting cost + 15% mark up to reverse the TPO’s arm’s length price computation coming to 20.75%. The Revenue’s case is that the said agreed mark up is applicable from FYs 2011-12 to 2014-15 whereas we are in AY 2010-11 only.
ITAT held that an advance pricing agreement “APA” is applicable only for the specified time span not exceeding five consecutive previous years u/s.92CC(4) r.w. sub section (9A) of the Act. We make it clear that Chapter X in the Act is in the nature of a “SPECIAL PROVISION RELATING TO AVOIDANCE OF TAX” i.e. an anti avoidance measure introduced by the legislature. Hon’ble apex court’s recent landmark decisions PCIT V/s Wipro Ltd. (2022) 140 com 223, Commissioner V/s Dilip Kumar & Co. 2018 (9) SCC 1(SC) FB & CIT V/s. GM Knitting Industries (P) Ltd.(2015) 376 ITR 456 (SC) have settled the law that the relevant provisions in the Act ought to be put to stricter interpretation only. Faced with this situation, we reverse the CIT(A)’s findings in issue going against sec. 92CC(4) r.w.s.(9A) of the Act (supra) and direct him to re-decide all of the assessee’s grounds in the lower appeal afresh as per law.
FULL TEXT OF THE ORDER OF ITAT PUNE
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