TMI Blog2021 (2) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... rise in the management or control or capital of the other enterprise, or the participation of one or more persons in the management or control or capital of both the enterprises shall not make them associated enterprises, unless the criteria specified in sub-Section (2) are fulfilled. From perusal of the aforesaid provisions, it is evident that sub-Sections (1) and (2) of Section 92A of the Act are interlinked and have to be read together. In case the provisions of sub-Sections (1) and (2) are read independently, we are afraid that one of the provisions would be rendered otiose which is impermissible in law in view of the well settled rule of statutory limitation. Therefore, the requirement contained in sub-Sections (1) and (2) of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 1,11,32,662/- for the Assessment Year 2010-11? 3. Facts leading to filing of this appeal briefly stated are that the assessee is a company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of manufacture and sale of ready made garments. The assessee - company is a licensee of the brand name 'Jockey' for the exclusive and marketing of Jockey readymade garments under license agreement with Jockey International Inc, a company incorporated in United States of America which is the owner of brand Jockey. In order to collect the brand name, the assessee paid consideration in the form of royalty at the rate of 5% of the sales. The assessee filed return of income for the Assessment Year 2010- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon filed objections before the Dispute Resolution Panel contesting all the additions. The Dispute Resolution Panel, however rejected the objections preferred by the assessee. The assessee thereupon filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal' for short). The Tribunal, by an order dated 24.06.2016, inter alia held that since the requirements laid down in Section 92A(1) has not been fulfilled, therefore, the provisions of Section 92A are not attracted to the fact situation of the case. To the aforesaid extent, the appeal preferred by the assessee was allowed. In the aforesaid factual background, the revenue has filed this appeal. 5. Learned counsel for the revenue submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal, which had held that sub-Sections 1 and 2 of Section 92A have to be read together and the aforesaid order passed by the Tribunal has been upheld by Gujarat High Court in 'PRL. COMMISSIONER OF INCOME TAX-CENTRAL Vs. VEER GEMS' (2017) 249 TAXMAN 264 (GUJ). Against the decision of Gujarat High Court, special leave petition was preferred by the revenue which was dismissed in 'PRL. COMMISSIONER OF INCOME TAX CENTRAL Vs. VEER GEMS' (2018) 256 TAXMAN 298 (SC). Therefore, both the provisions namely sub-Sections (1) and (2) have to be read together. It is also pointed out from the order passed by the Dispute Resolution Panel that the panel itself has recorded a finding that the Transfer Pricing Officer has gone into th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, in its management or control or capital, are the same persons who participate, directly or indirectly, or through one or more intermediaries, in the management or control or capital of the other enterprise. (2) For the purposes of sub-section (1), two enterprises shall be deemed to be associated enterprises if, at any time during the previous year - . (g) the manufacture or processing of goods or articles or business carried out by one enterprise is wholly dependent on the use of know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, or any data, documentation, drawing or specification relating to any patent, invention, model, design, secret formula ..... X X X X Extracts X X X X X X X X Extracts X X X X
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