LM Wind Power Blades (India) Pvt. Ltd. Vs DCIT (ITAT Bangalore)
The Income Tax Appellate Tribunal (ITAT), Bangalore, has ruled in favor of LM Wind Power Blades (India) Pvt. Ltd., deleting the protective addition made by the Assessing Officer (AO) concerning information & technology fees and commission payments. The case pertains to assessment years 2010-11, 2011-12, and 2013-14, where the Transfer Pricing Officer (TPO) had already made adjustments under Section 92CA of the Income Tax Act, 1961, on payments to associated enterprises (AEs). The Dispute Resolution Panel (DRP) later reduced these adjustments. However, despite the TPO’s determination, the AO made a protective disallowance of ₹2.13 crore on IT fees, prompting the company to appeal.
During the hearing, LM Wind Power informed the tribunal that it had entered into Mutual Agreement Procedure (MAP) proceedings with the competent authority, which culminated on August 29, 2024. As per the MAP resolution, the company had already settled its disputes regarding transfer pricing adjustments, including the ₹2.13 crore IT fee disallowance. Consequently, the tribunal noted that once a dispute is resolved under MAP, protective additions by the AO have no legal standing. The same reasoning was applied to assessment year 2011-12, where a similar IT fee adjustment of ₹1.91 crore was settled through MAP.
