Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (1) TMI 1543 - AT - Income TaxTP adjustment on account of Specified Domestic Transaction of Director's Remuneration - it is the case of the assessee that the AO/TPO accepted the TNM Method as the most appropriate method at the entity level - HELD THAT:- Benchmarking of the specified domestic transactions of director's remuneration while accepting the aggregated results, is not sustainable. The decision of the Mumbai Bench of the Tribunal in the case of Hindustan Unilever Limited [2012 (12) TMI 458 - ITAT MUMBAI] helps the assessee. Therefore, ground No. 3 should be allowed in favour of the assessee as a covered case. Transfer pricing adjustments on account of international transaction of corporate guarantee - case of the assessee is that the benchmarking of such international transaction of corporate guarantee is not valid as the referral made by the Assessing Officer to the TPO does not make a reference to such international transaction - HELD THAT:- From the above extracted portions of the judgment Times Global Broadcasting Company Limited [2019 (3) TMI 1309 - BOMBAY HIGH COURT] Hon'ble High Court dealt with the sub-sections 92A and 92B of the Act incorporated by the Statute by the Finance Act, 2011 and held that the TPO is barred from the benchmarking the specified domestic transactions when the Assessing Officer made a reference to the TPO for benchmarking the international transactions. The provision of these two sub-sections in the field of international transactions only was referred by this judgment (supra). In fact, it is evident from the contents in relation to the specified domestic transactions, the TPO cannot undertook transfer pricing study only in relation to those transactions which are referred to him under sub-section (1) of section 92CA of the Act. Considering the categorical finding of the Jurisdictional High Court, the jurisdictional issue raised by the assessee has to be allowed in favour of the assessee. Accordingly, the core legal issue raised by the assessee is allowed without going into the merits of the benchmarking exercise or quantification of the adjustments. Accordingly, ground No. 4 is allowed. Deductibility of education cess and secondary & higher education cess u/s. 37(1) - This issue is now covered by the judgment of the Hon'ble Rajasthan High Court in the case of Chambal Fertilisers and Chemicals Ltd. [2018 (10) TMI 589 - RAJASTHAN HIGH COURT] education Cess, which is not disallowable item, on its payment, the cess is an allowable expenditure as per provision of section 40(a)(ii) - Decided n the favour of assessee.
|