Schindler India Pvt. Ltd. Vs DCIT (ITAT Mumbai)
Mumbai ITAT: APA Neutralises TP Disallowance; AO Can’t Re-Invoke s.37 on Covered Transactions; 80JJAA Deduction Allowed
Assessee, engaged in design, supply, installation & commissioning of elevators & escalators, faced TP adjustment of ₹107.84 crore on royalty, IT support & SAP charges & management recharge, with TPO determining ALP at NIL on “need-rendition-benefit” premise. During appellate proceedings, Assessee placed on record a unilateral APA dated 15.10.2024 with CBDT covering FYs 2015-16 to 2019-20 including AY 2017-18, with rollback for earlier years, squarely covering all impugned international transactions. In view of binding nature of APA u/s 92CC(5), Assessee withdrew TP grounds, which Tribunal dismissed as withdrawn.
Tribunal held that once ALP of the impugned transactions stands agreed under APA after detailed FAR analysis & benefit examination, Revenue cannot indirectly disallow the same expenditure u/s 37 by questioning commercial expediency; doing so would render APA meaningless. Relying on YKK India (P) Ltd vs DCIT, Tribunal allowed Assessee’s ground against s.37 disallowance.
On deduction u/s 80JJAA of ₹64.11 lakh, Tribunal noted that Form 10DA was filed with return & requisite details were furnished during e-proceedings, which AO/DRP failed to consider. Holding that Assessee discharged its onus & remand would only reward administrative lapse, Tribunal allowed the 80JJAA claim. Credit of DDT of ₹11.65 crore was directed to be granted on verification of challans, while prepaid tax ground was dismissed as not pressed & interest u/s 234B/234C held consequential. Appeal partly allowed.
Once APA covers an international transaction, AO cannot reopen “need or benefit” under s.37; TP settled by APA binds both sides.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal filed by the assessee is against the final assessment order passed by National Faceless Assessment Centre, Delhi (NFAC) vide order no. ITBA/AST/S/143(3)/2021-22/1040015716(1) dated 22.02.2022 u/s. 143(3) r.w.s. 144C(13) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) pursuant to the directions of ld. Dispute Resolution Panel-2, Mumbai, (DRP) vide order no. ITBA/DRP/F/144C(5)/2021-22/1039079646(1), dated 25.01.2022, passed u/s. 144C(5), for Assessment Year 2017-18.
