EYGBS (India) LLP Vs DCIT (ITAT Bangalore)
The issue under consideration is whether denial of claim of deduction u/s 10AA of the Act on transfer pricing adjustment made by the assessee voluntarily is justified in law?
ITAT states that the issue thus, has been decided by the Hon’ble High Court of Karnataka in the case of iGate Global Solutions Ltd. (supra), wherein the assessee’s claim for deduction under section 10A of the Act in respect of suo-moto TP adjustment made by the assessee, has been allowed. The Bangalore Bench of Tribunal in a later decision in the case of Austin Medical Solutions (P.) Ltd. (supra) has applied the said proposition of the Hon’ble High Court of Karnataka (supra) and had allowed the deduction claimed under section 10A of the Act in respect of suo-moto TP adjustment while determining the arm’s length price of international transactions. The learned Departmental Representative for the Revenue on the other hand, had placed reliance on the ratio laid down by Mumbai Bench of Tribunal in Deloitte Consulting India Pvt. Ltd.’s case (supra), which does not stand because of the ratio laid down by the Hon’ble High Court of Karnataka on the said issue. Though the said decision is of non-jurisdictional High Court, but the same is binding on the Tribunal in the absence of any contrary decision of the jurisdictional High Court as held by the Hon’ble Bombay High Court in Smt. Godavaridevi Saraf ‘s case (supra). The learned Authorized Representative for the assessee has also placed reliance on various decisions of different Benches of Tribunal for the proposition that the decision of non-jurisdictional High Court is binding on the Tribunal. However, the issue stands covered by the jurisdictional High Court and applying the said proposition and in view of our decisions in the paras hereinabove on other issues raised in the present appeal, ITAT hold that the assessee is entitled to claim the aforesaid deduction under section 10A of the Ac on additional income offered on account of suo-moto adjustment on account of transfer pricing provisions. The provisions of section 92C(4) of the Act are not attracted. Identical view has been expressed by the Delhi bench of Tribunal in the case of AT Kearney India P Ltd. Accordingly ITAT hold that the assessee is eligible for deduction u/s 10AA of the Act in respect of voluntary Transfer Pricing adjustment made by it. ITAT direct accordingly.
