TMI Blog2021 (4) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... aim of expenditure mentioned above in terms of the provisions of section 40A(2) of the Act.In the result, the appeal of the assessee is treated as allowed for statistical purposes. - ITA No.2936/Bang/2018 - - - Dated:- 22-4-2021 - Shri George George K., Judicial Member And Shri B.R. Baskaran, Accountant Member For the Appellant : Shri Nageshwar Rao, A.R. For the Respondent : Ms. Neera Malhotra, D.R. ORDER PER B.R. BASKARAN, ACCOUNTANT MEMBER: The assessee has filed this appeal challenging the assessment order dated 28-08-2018 passed by the assessing officer u/s 143(3) r.w.s 144c(13) of the Income-tax Act,1961 ['the Act' for short] in pursuance of directions given by Ld Dispute Resolution Panel (DRP). The solitary issue contested in this appeal relate to the Transfer Pricing adjustment in respect of Specified Domestic Transactions (SDT). 2. The assessee herein is a Partnership firm and is engaged in real estate development business. It has entered into Specified Domestic Transactions during the year. Hence the SDT transactions were referred to the Transfer Pricing Officer (TPO), who made Transfer pricing adjustments to the tune of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h and the Hon ble High Court of Karnataka in the case of Texport Overseas Pvt Ltd were followed. For the sake of convenience, we extract below the decision rendered in the case of Cauvery Aqua Private Ltd (supra) by the co-ordinate bench:- The Ld. A.R. submitted that the legal effect of omission of clause (i) of section 92BA was examined by the coordinate bench in the case of Texport Overseas Pvt. Ltd. Vs. Deputy Commissioner of Income-tax in IT(TP)A No.1722/Bang/2017 dated 22.12.2017 and the coordinate bench held as under:- 7. Having carefully examined the orders of authorities below in the light of rival submissions and relevant provisions and various judicial pronouncements, we find that by virtue of the insertion of section 92BA on the statute as per clause (i), any expenditure in respect of which payment has been made or is to be made to person referred to in clause (b) of sub section 2 of section 40A exceeds the prescribed limit, it would be a specified domestic transaction for which AO is required to make a reference to TPO under section 92CA of the Act for determination of the ALP. In the instant case, since the transaction exceeds the prescribed limit it becomes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd. The relevant observation of the jurisdictional High Court is extracted hereunder: 8. Admittedly, in the instant case, there is no saving clause or provision introduced by way of an amendment while omitting subsection (9) of Section 10B. Therefore, once the aforesaid section is omitted from the statute book, the result is it had never been passed and be considered as a law that never exists and therefore, when the assessment orders were passed in 2006, the AO was not justified in taking note of a provision which was not in the statute book and denying benefit to the assessee. The whole object of such omission is to extend the benefit under Section 10B of the Act irrespective of the fact whether during th$ period to which they are entitled to the benefit, the ownership continues with the original assessee or it is transferred to another person. Benefit is to the undertaking and not to the person who is running the business. We do not see any merit in these appeals. The substantial question of law is answered in favour of the assessee and against the revenue. Accordingly, the appeals are dismissed. 9. From the aforesaid judgments, it has become abundantly clear tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. in ITA No.392/2018 dated 12.12.2019. Accordingly, the Ld. A.R. submitted that the transfer pricing adjustment is liable to be deleted. When it was pointed out that the coordinate bench has restored the issue to the file of the A.O. for examining the payments in terms of section 40A(2) of the Act, the Ld. A.R. submitted that this issue may be restored to the file of the A.O. for examining it in accordance with the provisions of section 40A(2) of the Act. 6. The Ld. D.R., on the contrary, placed her reliance on the decision rendered by the Mumbai Bench of Tribunal in the case of Firemenich Aromatics India Pvt. Ltd. Vs. ACIT in ITA No.348/Mum/2014 dated 15.7.2020. The Ld. D.R. submitted that the Mumbai Bench of Tribunal has expressed the view that the decision rendered by Hon ble Apex Court in the case of Fiber Bores Pvt. Ltd. (2015) 52 Taxmann.com 135 and in the case of M/s. Shree Bhagawati Steel Rolling Mills Ltd. (CA No.4280/2007 dated 24.11.2015) shall prevail in the case of omission of the provision in the Income Tax Act. As a result, the provisions of section 6 of the General Clauses Act would apply to save operation of the previous provision so omitted or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not been passed. 6-A. Repeal of Act making textual amendment in Act or Regulation :- Where any [Central Act] or Regulation made after the commencement of this Act repeals any enactment by which the text of any [Central Act] or Regulation was amended by the express omission, insertion or substitution of any matter, then, unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal. 24. Continuation of orders, etc., issued under enactments repealed and reenacted, . Where any (Central Act) or Regulation, is, after the commencement of this Act, repealed and re-enacted with or without modification, then, unless it is otherwise expressly provided any (appointment notification,) order, scheme, rule, form or bye-law, (made or) issued under the repealed Act or Regulation, shall, so far as it is not inconsistent with the provisions reenacted, continue in force and be deemed to have been (made or) issued under the provisions so reenacted, unless and until it is superseded by any (appointment, notification,) order, scheme, rule, form or bye-law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther Hon ble Supreme Court in Ekambrarappa Vs EPTO (AIR 1967 1541), held that amending Act which limits the area of operation of existing Act by modifying the extent clause, result in partial repeal of the Act in respect of the area which its operation is excluded ( emphasis and under lines are added by us). 17. Further, the Hon ble Supreme Court in the matter of Fibre Boards P. Ltd dated 11.08.2015 reported vide [(2015) 52 taxmann.com 135] /(2015) 10 SCC 333, as well as in the matter of M/s. Shree Bhagwati Steel Rolling Mills [CA No.4280 of 2007, dt.24.11.2015], reported vide (2016) 3 SCC 643, wherein the Hon ble Supreme Court in these two cases elaborately discussed the issue of repeal /omission/ amendment etc, and held that omission would amount to repeal . It is also held that there is no real distinction between an amendment and that amendment is in fact a wider term which includes deletion of the provision in an existing statue. 18. The Hon ble Court in M/s. Shree Bhagwati Steel Rolling Mills (supra) in a later decision, while referring its order in Fibre Board Private Ltd (supra) held that omission would amount to repeal. On the argument of the contesting par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral Finance Company Vs CIT (2002) 7 SCC 1. Further, the Hon'ble Supreme Court in the case of Fibre Boards (I) Ltd, after referring to the provisions of Section 6A of the General Clauses Act held that a repeal can be by way of an express omission and that even an implied repeal of a statute would fall within the expression repeal in section 6 of the General clauses Act. Repeals may take any form and so long as a statute or part of it is obliterated, such obliteration would be covered by the expression repeal in section 6 of General clauses Act. Considering the latest decision of Hon ble Supreme Court in Fibre Board and Bhagwati Steel, the earlier decisions rendered by the Constitution Bench in Rayala Corporation (P) Ltd and Kolhapur Cansugar Works cannot be said to have laid down any ratio decidendi on an interpretation of the word repeal an omission would not be included. Their observations are in the nature of obiter dicta as held by the Supreme Court in Fibre Boards. It is also held that the earlier decisions have not referred to Section 6A of the General clauses Act and they lose their binding effect on an application of the per incuriam principle, as hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation is per in curium, on the basis of which General Finance Co., (supra) was passed. Thus, the later judgments in Fibre Board (supra) and Bhagwati Steel Rolling (supra) shall have a binding precedent on all Courts in India including this Tribunal. 20. We may mention that the decision of the Hon ble Apex Court is declaration of law as per Article 141 of the Constitution of India. The law declared by Hon ble Apex Court in Fibre Boards (P) Ltd (supra) dated 11.08.2015, was available when the decisions was rendered by Bangalore Tribunal Textport Overseas Pvt Limited Vs DCIT (supra), however, the same was not brought to the notice of the bench. The coordinate bench while rendering the decision relied on the decision of Hon ble Apex Court in General Finance Co. Vs ACIT (supra), which was already declared as perin curium. Similarly, the decision in General Finance Co (supra) is based on Rayala Corporation P. Ltd Vs Director of Enforcement (supra) and Kolhapur Canesugar Works Ltd Vs Union of India (supra). Considering the aforesaid legal position and the dates of various judgments of the Hon ble Apex Court, we are of the view that ld. AR for the assessee has referred and relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on finds them, and if final relief has not been granted before the omission goes into effect, it cannot be granted afterwards. Savings of the. nature contained in Section 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceedings shall not continue but fresh proceedings for the same purpose may be initiated under the new provision. 6. In fact coordinate bench under similar circumstances had examined the effect of omission of sub-section (9) to Section 10B of the Act w.e.f. 01.04.2004 by Finance Act, 2003 and held that there was no saving clause or provision introduced by way of amendment by omitting sub-section (9) of Section 10B. In the matter of GENERAL FINANCE CO. vs. ACIT, which judgment has also been taken note of by the tribunal while repelling the contention raised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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