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2023 (2) TMI 1256 - AT - Income TaxTP adjustment relating to Specified Domestic Transactions - resultant effect of omitted clause (i) of section 92BA with effect form 01/04/2017 - HELD THAT:- Effect of omission of a provision has been examined in the case of Texport Overseas (P) Ltd [2017 (12) TMI 1719 - ITAT BANGALORE] and the same has been affirmed by Hon’ble Karnataka High Court [2019 (12) TMI 1312 - KARNATAKA HIGH COURT]. It has been held in the above said cases that the proceedings in respect of omitted provisions cannot be continued. Accordingly transfer pricing adjustment relating to Specified Domestic Transactions is liable to be deleted on account of omission of provisions of sec. 92BA(i) of the Act. Even though the co-ordinate bench of Mumbai, in the case of Firemenich Aromatics (I) (P) Ltd [2020 (7) TMI 658 - ITAT MUMBAI] has expressed its doubt on the correctness of the decision rendered by the Bangalore bench of Tribunal in the case of Texport Overseas (P) Ltd (supra), yet the fact remains that the said decision of Bangalore bench has since been upheld by Hon’ble Karnataka High Court. Accordingly, we prefer to follow the decision rendered by Higher Court of Wisdom and accordingly hold that the transfer pricing adjustment made in respect of Specified Domestic Transaction on the basis of omitted provision is liable to be deleted. Specified domestic transactions are required to be examined u/s 40A(2)(b) - We notice that the Bangalore bench of Tribunal has expressed the view that the transactions with Associated Enterprises need to be examined u/s 40A(2)(b) of the Act after omission of sec.92BA(i). Accordingly, the matter has been restored to the file of AO and direct the AO to delete the addition made towards the transfer pricing adjustment. Since the said specified domestic transactions are required to be examined u/s 40A(2)(b) of the Act, we restore the same to the file of AO for carrying out such examination. Appeal filed by the assessee is treated as allowed for statistical purposes.
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