TMI Blog2018 (7) TMI 1848X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent- Assessee JUDGMENT The appellants- Revenue have filed this appeal u/s. 260A of the Income Tax Act, 1961 (for short Act ) raising purportedly certain substantial questions of law arising from the order of the Income Tax Appellate Tribunal, A Bench, Bangalore (for short Tribunal ) dated 11.07.2014 passed in I.T (TP)A No.1315/Bang/2011 for the A.Y.2007-08. 2. The proposed substantial questions of law framed in the memorandum of appeal by the appellants- Revenue is quoted below for ready reference: 1. Whether on the facts and in the circumstances of the case, the Tribunal is right in setting aside the Arm s Length Price determined by the Transfer Pricing Officer by relying on its earlier decision pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as to whether the international transactions have to be considered separately or independently without aggregating them as part of the segment to which they relate, we find that the term international transaction has been defined in section 92B of the Act to mean and include transactions between two or more AEs, either or both of whom are non-residents, in the nature of purchase, sale or lease of tangible or intangible property, or provision of services, or lending or borrowing money or any other transaction having bearing on the profits, income, losses or assets of such enterprise. Section 92 of the Act provides that income from international transactions between AEs shall be computed having regard to ALP. Section 92-C of the Act presc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous that they cannot be evaluated adequately on an individual basis. In such a situation, rather than assessing the ALP of the transactions individually, the transactions could be evaluated together using the most appropriate method. 43. The above being the legal position, it becomes necessary to examine the international transactions carried out by the assessee with its AE during the previous year which have been categorized into 2 segments by the TPO in his order and find out if they are interlinked or interconnected so that the transactions need to be evaluated together rather than individually. In this regard, we find that the submissions made by the Assessee before TPO as well as before DRP have not been considered at all. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entical and there has been no change whatsoever in the business model of the assessee. In these circumstances, we are of the view that the decision rendered by the Tribunal would be applicable for this assessment year also. Respectfully following the decision of the Tribunal, we hold that the trading and manufacturing segment of the assessee are not distinct and are inter-related warranting combined transaction approach. 46. We have already seen in para 9 of this order that the TPO has arrived at the bifurcation of the manufacturing and trading segmental operating results. In view of our conclusions that the trading and manufacturing segments are interlinked and therefore a combined transaction approach has to be adopted, we combine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference: Conclusion: 55. A substantial quantum of international trade and transactions depends upon the fair and quick judicial dispensation in such cases. Had it been a case of substantial question of interpretation of provisions of Double Taxation Avoidance Treaties (DTAA), interpretation of provisions of the Income Tax Act or Overriding Effect of the Treaties over the Domestic Legislations or the questions like Treaty Shopping, Base Erosion and Profit Shifting (BEPS), Transfer of Shares in Tax Havens (like in the case of Vodafone etc.), if based on relevant facts, such substantial questions of law could be raised before the High Court under Section 260-A of the Act, the Courts could have embarked upon such exercise of fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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