PCIT Vs Maruti Suzuki India Ltd. (Delhi High Court)
Settled Issues Stay Settled- Covered Issues Cannot Be Reopened – Delhi HC Dismisses Revenue’s Appeals in Maruti Suzuki Case
Maruti Suzuki India Ltd., the country’s leading automobile manufacturer, filed its return for AY 2010-11 declaring income of ₹3,259 crore. The case was scrutinized, & AO framed assessment u/s 143(3) r.w.s. 144C, determining income at over ₹4,591 crore after making multiple disallowances.
The major issues included:
- Disallowance of statutory dues (excise duty, customs duty, CVD, sales tax) claimed u/s 43B.
- CSR expenditure of ₹11.3 crore.
- Provision for foreseen price increase (FPI) on components.
- Transfer pricing adjustment of ₹442.92 crore on royalty payments to Suzuki Motor Corporation (SMC), Japan.
- PE attribution of profits to SMC.
- Deduction u/s 35(2AB) for in-house R&D expenditure. Both Assessee & Revenue approached ITAT. In February 2023, ITAT allowed Maruti’s appeal partly while dismissing Revenue’s appeal.
Revenue raised 19 substantial questions of law covering all the above issues. Its main contention was that ITAT erred in deleting large additions & TP adjustments without appreciating the facts of the year.
The High Court noted that all the issues were squarely covered by binding precedents in Maruti Suzuki’s own cases for earlier years.
- Excise duty, customs duty, CVD & statutory dues: Already decided in Assessee’s favour by Delhi HC for AYs 1999-00, 2000-01, 2005-06 & 2006-07, which now stand affirmed by Supreme Court on 27.03.2025.
- CSR expenditure: Revenue’s challenge for AY 2009-10 was not admitted earlier, hence issue settled in favour of Assessee.
- Provision for FPI: Revenue’s appeals on this ground in prior years (2007-08 to 2009-10) were not admitted.
- Royalty disallowance & TP adjustment: Already examined & decided in Assessee’s favour for AYs 2005-06, 2007-08, 2008-09 & 2009-10.
- Deduction u/s 35(2AB): Covered by Maruti Suzuki India Ltd. vs. Union of India (397 ITR 728, Del HC) & other rulings.Since the questions had already been adjudicated, the Court held that no fresh substantial question of law arose.
Decision
- Both appeals of Revenue (ITA 321/2025 & ITA 323/2025) were dismissed.
- The Delhi HC categorically held that Revenue cannot keep re-agitating settled issues, especially after affirmation by the Supreme Court.
This ruling underscores judicial consistency- once issues are decided by High Court or Supreme Court in earlier years, Revenue cannot re-litigate them for subsequent years unless facts change materially.
