Case Law Details
Imperial Mark Trade (I) Pvt. Ltd. Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that adjustment on account of examination of the arm’s-length price of the specified domestic transactions is not valid because of deletion of the provisions of Section 92BA (1) of the Act with effect from 1/4/2017. Provisions of Section 40A (2) of the act governs the allowability of those expenditure.
Facts- The present appeal has been filed by the assessee contesting disallowance/ transfer pricing adjustment of high seas purchase of crude palm oil; disallowance/ transfer pricing adjustment of purchase of guar gum (split); disallowance/transfer pricing adjustment of sales return of guar seeds; etc.
Conclusion- Co-ordinate Bench of the Tribunal in Mahindra Two Wheelers Ltd. v/s DCIT has held that the adjustment on account of examination of the arm’s-length price of the specified domestic transactions is not valid because of deletion of the provisions of Section 92BA (1) of the Act with effect from 1/4/2017 without any saving clause, but it held that provisions of Section 40A (2) of the act governs the allowability of those expenditure and therefore coordinate bench set-aside the matter back to the file of the learned assessing officer.
Held that as a similar issue is arising in the present appeal, we see no reason to deviate from the view so taken by the Co-ordinate Bench of the Tribunal in the aforesaid decision. Accordingly, respectfully following the aforesaid decision the transfer pricing adjustment of Rs.245,45,18,050/-, made by the AO/TPO in respect of specified domestic transactions is not sustainable. However, the AO was directed to examine the allowability of the expenditure in terms of provisions of Section 40A(2) of the Act.
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