Piaggio Vehicles Private Limited Vs ACIT (ITAT Pune)
ITAT Pune held that the DTAA does not get triggered at all when a domestic company pays DDT u/s. 115O of the Income Tax Act. In nut-shell, domestic company doesn’t enter domain of DTAA at all.
Facts- The assessee is a domestic company and is engaged in manufacture and sale of three and four wheeler motor vehicles for the transportation of goods and passengers. The case was selected for scrutiny through CASS. A reference was made to the Transfer Pricing Officer u/s 92CA(1) of the Act to determine the Arm’s Length Price of the international transactions entered into by the assessee with its Associate Enterprises during the relevant AY. Pursuant thereto an upward adjustment of Rs.7,36,97,574/- (Rs.1,53,75,780/- in respect of import of traded spares and Rs.5,83,21,794/- in respect of payment of corporate guarantee fees) was proposed by the TPO vide his order dated 31.10.2019 passed u/s 92CA(3) of the Act. AO after incorporating the above transfer pricing adjustment completed the assessment u/s 143(3) r.w.s.144C(3) of the Act on 27.01.2022 assessing the total income of the assessee at Rs.2,52,11,98,880/-.
The assessee carried the matter in appeal before CIT(A) challenging the transfer pricing adjustment of Rs.7,36,97,574/- which were allowed by CIT(A). The assessee therefore prayed before the CIT(A) that the DDT discharged by it during the AY 2016-17 in excess of 15% as prescribed under Article 11(2) of the India-Italy DTAA should be allowed as refund to it. CIT(A) decided the identical issue of refund of excess taxes paid on dividend distribution in assessee’s own case in favour of the revenue. Accordingly, being aggrieved, the present appeal is filed.
