DCIT Vs Alembic Pharmaceuticals Ltd. (ITAT Ahmedabad)
ITAT Ahmedabad held that upward transfer pricing adjustment on account of corporate guarantee fee given to Associate Enterprise is not sustainable based on settled orders of Co-ordinate bench of Tribunal in earlier years. Accordingly, appeal of department dismissed.
Facts- The assessee is engaged in the business of development, manufacturing and marketing of pharmaceuticals products, i.e. Formulations and Active Pharmaceuticals Ingredients. During the course of assessment proceedings, a reference was made by AO to the Transfer Pricing Officer (TPO) u/s. 92CA(1) of the Act for determination of Arm’s Length Price. The TPO vide order dated 30.10.2023, u/s. 92CA(3) of the Act, made a total adjustment of INR 2,55,68,000/- to the total income of the assessee on account of provision of corporate guarantee. Thereafter, AO passed the assessment order dated 29.01.2024, in consonance with the order passed by the TPO, computing an adjustment of INR 2,55,68,000/-.
CIT(A) granted relief to the assessee by deleting the upward adjustment of INR 2,55,68,000/- on account of guarantee fee/commission charged for the guarantee given by the assessee to its AEs. Being aggrieved, department has preferred the present appeal.
Conclusion- Held that the issue of Corporate Guarantee Fee stands settled by the orders of the Co-ordinate Benches of the Tribunal for AY 2015-16, AY 2016-17, AY 2018-19 & AY 2015-16 in assessee’s own case. In the absence of any change in the factual matrix and legal preposition, we decline to interfere with the order of the Ld. CIT(A). Further, with regard to MEIS, we find that the issue stands adjudicated by the orders of the Co-ordinate Benches of the Tribunal for AY 18-19 & AY 20-21 in assessee’s own case. In the absence of any change in the factual matrix and legal preposition, we decline to interfere with the order of the Ld. CIT(A). In the result, the appeal of the Revenue is dismissed.
