9911796707
TMI Blog2021 (7) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... ther CIT(A) is justified in holding that DEPB incentives are to be considered for comparability analysis ignoring the fact that considering DEPB incentives for comparability analysis results in shifting of incentives to foreign territory which is against the objecting of Transfer Pricing Law. 3. In the facts and circumstances of the case whether CIT(A) is justified in deleting the adjustment on Corporate Guarantee fees ignoring the fact that no independent party will stand guarantee for any other party charging less that the appropriate fees/commission determined by the market conditions. 4. Any other ground that may be urged at time of hearing". 3. We advert to the former issue of inclusion of the assessee's DEPB incentives in rule 10(B)(1)(a)(ii) of Income Tax Rules as an adjustment in the Comparable Un-controlled Price "CUP" method for the purpose of arriving at arm's length price 'ALP' under the provisions of the Act. 4. We start with the basic relevant facts. This assessee is admittedly a company, manufacturing ferro alloys and sugar, fabrication of equipment and generation of power. It filed its return on 29-11-2013 admitting total income of Rs. 173,64,26,290/- after cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this regard, the submissions made by the appellant company were verified and it is noticed that the appellant company has relied upon the Hon'ble Bombay High Court decision in the case of CIT vs. Welspun Zucchi Textiles Limited (391 ITR 211), wherein it was held that DEPB benefits are to be considered for comparison of prices. Further, as per the appellant's submissions, Hon'ble ITAT, Delhi Bench, in the case of Degania Medical Devices (P) Ltd., vs. ACIT, wherein it was held that DEPB/Duty Drawback are part of the operating profits should not be excluded for the purpose of comparability analysis. Therefore, after considering the submissions of the appellant and case laws relied upon, the Assessing Officer is directed to verify and consider the DEPB benefit for comparability analysis and rework out the adjustment on account of selling price". 7. We have given our thoughtful consideration to rival pleadings qua the assessee's case that its DPEB benefits derived from sale of Silico Manganese Ferro Chrome deserve to be considered as an adjustment under rule 10B(1)(a)(ii) of the Income Tax Rules. Learned counsel has also filed a written note with catena of case law hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt in such an instance goes to the assessee and Revenue; respectively. We are unable to loose sight of the fact that chapter-X is 'special' as against all other general provisions including Section(s) 10, 10A, 10AA and 10B etc; as the case may be. We cite legal maxim 'Generalia Speialibus Non-Derogant' meaning that a general provision does not apply at the cost of the special one or the former of them must make way for the latter; respectively; and, are of the opinion that the assessee's arguments go against arm's length price defined as "a price which is applied or proposed to be applied in a transaction between persons other than associate enterprises, in uncontrolled conditions" only. So far as the assessee's case that various judicial precedents (supra) have already decided the issue in its favour, we quote the foregoing hon'ble apex court's decision binding on all the "Courts" within the territory of India as per Article 141 of the Constitution and hold that none of them consider the legislature scheme in Chapter-X (supra). And that deviates therefrom would not only violates the same but also would amounts to non-compliance of "between persons" in Section 92F. 9. Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given in ignorance of the terms of a statute or rule having statutory force." 40. In Punjab Land Development and Reclamation Corporation Ltd. v. Presiding Officer, Labour Court , the Supreme Court explained the expression "per incuriam" thus (at page 36 of 77 FJR) : "The Latin expression per incuriam means through inadvertence. A decision can be said generally to be given per incuriam when the Supreme Court has acted in ignorance of a pervious decision of its own or when a High Court has acted in ignorance of a decision of the Supreme Court." 42. As has been noticed above, a judgment can be said to be per incuriam if it is rendered in ignorance or forgetfulness of the provisions of a statute or a rule having statutory force or a binding authority. But, if the provision of the Act was noticed and considered before the conclusion arrived at, on the ground that it has erroneously reached the conclusion the judgment cannot be ignored as being per incuriam. In Salmond on Jurisprudence, Twelfth Edition, at page 151, the rule is sated as follows : "The mere fact that (as is contended) the earlier court misconstrued a statute, or ignored a rule of construction, is no ground for im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect on application of chapter-X of the Act as per stricter interpretation rule. We therefore accept the Revenue's instant former substantive grievance. 9.1. Next comes latter issue of corporate guarantee adjustment of Rs. 3,51,06,335/- deleted in the CIT(A)'s detailed discussion as under: "5.1 With regard to adjustment on amount of shortfall in corporate guarantee commission of Rs. 3,51,06,335/-, after considering the submissions of the appellant company and also by following earlier order in the appellant's own case for the AY.2011-12, wherein I decided the issue in favour of the appellant company by observing that, "the Transfer Pricing Officer had charged corporate guarantee commission @ 2% which is higher than the appellant charged. Since the appellant has charged a reasonable corporate guarantee commission i.e. @ 0.875% are more than the Tribunals allowed. Therefore, the addition made by the Assessing Officer is hereby deleted". Therefore, the addition made by the Assessing Officer is deleted". 9.2. It has come on record that the assessee had itself recorded comparable guarantee commission @8.75% i.e. much more than that that decided by the tribunal (supra). We therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
