2018 (4) TMI 1753 - HC - Income Tax

TP Adjustment - Tribunal considering TNMM as MAM - HELD THAT - In the absence of the any distinguishing features being shown the in the subject Assessment Year to that existing in Assessment Years2006-07, 2007-08and 2008-09, the same must apply in the subject Assessment Year. The reasons indicated in our order in respect of the Appeal 2018 (3) TMI 536 - BOMBAY HIGH COURT in respect of the same respondent assessee for the earlier assessment years would equally apply to the facts of the present appeal. No substantial question of law.

Summary

Issues: Challenge to order of Income Tax Appellate Tribunal under Section 260A of the Income Tax Act, 1961 for Assessment Year 2005-06. Consideration of TNMM as MAM without FAR analysis in TP study report.

Analysis:
1. The judgment pertains to an appeal challenging the order of the Income Tax Appellate Tribunal for Assessment Year 2005-06 under Section 260A of the Income Tax Act, 1961. The key question raised by the Revenue was whether the Tribunal was justified in considering the Transactional Net Margin Method (TNMM) as the Most Appropriate Method (MAM) without taking into account the Functional Analysis Report (FAR) of the transaction as presented in the Transfer Pricing (TP) study report.

2. The Court noted that the facts relevant to the question at hand were similar to those in Assessment Years 2006-07, 2007-08, and 2008-09. The Tribunal's decision in the present case was based on its earlier order dated 30th May, 2015, which was also upheld by the Court in appeals related to the aforementioned assessment years. The Court found no distinguishing features in the current assessment year that would warrant a different decision from the previous years.

3. Given the consistent application of the Tribunal's order and the Court's decision in related appeals, the Court concluded that the question posed did not raise any substantial question of law. Therefore, the Court declined to entertain the question raised by the Revenue. Consequently, the appeal was dismissed, and no costs were awarded in the matter.

4. The judgment underscores the importance of consistency in legal decisions, especially in matters involving tax assessments and transfer pricing methodologies. It highlights the significance of factual similarities across assessment years and the relevance of prior judicial determinations in shaping current outcomes. The decision serves as a reminder of the legal principles governing tax disputes and the need for thorough consideration of facts and legal precedents in resolving such matters.