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2023 (10) TMI 1358 - AT - Income TaxValidity of initiation of TP proceedings - resultant effect of omitted clause (i) of section 92BA with effect form 01/04/2017 - addition of specified domestic transaction by invoking provision of Clause (i) of Section 92BA as omitted from the Act - HELD THAT:- It is an undisputed fact that the reference to the ld. TPO with respect to specified domestic transaction was made under clause (i) of Section 92BA which was brought in the statute by the Finance Act 2012, however, has been omitted from the statute of the Finance Act 2017 w.e.f. 01/04/2017. The case of the assessee is that once omission has been made without the said clause, it is deemed that the said clause was never part of the Act wherein as the case of the department is that the omission was brought by the amendment by the Finance Act 2017 w.e.f. 01/04/2017. Therefore, the reference at that point of time was valid. This issue has been discussed in the case of PCIT vs. Texport Overseas (P) Ltd. [2019 (12) TMI 1312 - KARNATAKA HIGH COURT] relying upon the judgment of Kolhapur Canesugar Works Ltd vs. Union of India [2000 (2) TMI 823 - SUPREME COURT] have held that once the statute has omitted clause (i) of Section 92BA by the Finance Act, 2017, the resultant fact is that it had never been enacted and to be considered as a law and it never existed. DR referred to various judgments of the Apex Court including the judgment of Hon’ble Supreme Court in the case of Shri Bhagwati Steel Rolling vs. Commissioner of Central Excise [2015 (11) TMI 1172 - SUPREME COURT] This exact issue has been dealt in detail in the case of Yorkn Tech Pvt. Ltd., [2021 (8) TMI 1374 - ITAT DELHI] that once a provision in the statute has been omitted without any saving clause in the Act, then, it is treated that if provisions does not exist when such provisions are challenged before the Court and the aforesaid decision of the Tribunal, the ratio and principle laid down by the Constitutional Bench as well as subsequently, judgments referred by the ld. DR has been discussed in detail, therefore, following the same ratio we hold that in view of the exemption of Section 92BA(i) will lead to inference that in so far as any reference to the ld. TPO for SDT in Section 92BA(i) is invalid and no transfer pricing adjustment can be made on such SDT. Accordingly, the cross objection of the assessee is allowed and consequently, the appeal of the Revenue is dismissed.
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