TMI Blog2021 (5) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of the Income Tax Tax Act, 1961 within a period of 3 months from the date of receipt of a copy of this order. - W.P.Nos.25583 and 25584 of 2017 & W.M.P.Nos.26975 and 26976 of 2017 & 20188 of 2019 - - - Dated:- 27-5-2021 - HONOURABLE MR. JUSTICE C.SARAVANAN For Petitioner : Mr. Vaibhav R Venkatesh (in both the W.P's.) For Respondent : M/s. Hema Murali Krishnan Sr. Standing Counsel (in both the W.P's.) COMMON ORDER A short point that arises for consideration in these writ petitions is whether the respondent Assessing Officer was justified in passing the impugned orders dated 6.3.2017 before passing a Draft Assessment Order under section 143(3) read with Section 92CA (4) and Section 144C (1) of the Income Tax Act, 1961. 2. Earlier by an order dated 24.8.2016, the Income Tax Appellate Tribunal had allowed the appeal filed by the respondent in I.T.A.Nos 952/Mds of 2015 and I.T.A.No740/Mds 2016 for the Assessment Years years 2010-11 and 2011-12 with the following observations:- 7. We have heard both the parties and perused the material on record. The main issue for consideration is whether the CUP method to be followed or TNMM to be followed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred or laid out for the purposes of business, it is no concern of the TPO to disallow the same on any extraneous reasoning. As provided in the OECD guidelines, he is expected to examine the international transaction as he actually finds the same and then makes suitable adjustment but a wholesale disallowance of the expenditure, particularly on the grounds which have been given by the TPO is not contemplated or authorized. 9.2. After hearing the parties with reference to material on record, we find that the authorities below have not conclusively held that the assessee could not enter into such a transaction nor had they disallowed the same by holding that such an expenditure is not assessee's business expenditure. The DRP as well as the authorities below have merely elucidated that the payments are reimbursement in respect of Ms.Rita Ricken and other personnel's case to serve the interest of share holders. By saying so they have only described the circumstance under which the international transaction has been entered by the appellant, so as to test the benefit that can be said to have reached the assessee. It, therefore, cannot be said to have questioned the commerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Dispute Resolution Panel upheld the conclusion of the Transfer Pricing Officer. The Tribunal held that since the Dispute Resolution Panel had reaced a finding that the SAP licence and MS Office had been purchased at a lower rate and had benefited the assessee, it was not proper to uphold the conclusion of the Transfer Pricing Officer for adding the said amount to the assessee's income. The Tribunal held that the assessee had discharged the onus that the international transactions had been benchmarked at an arm's length price in respect of the SAP licence and, accordingly, directed the Assessing Officer to delete the addition. 55.Had the matter rested only on the question of appreciation of facts, we would not have and indeed could not have interfered in appeal. However, in view of our finding on the questions of law in the assessee's appeal, it would be necessary for the authorities to consider this matter afresh in the light of those observations as well. It would be necessary upon remand for the authorities under the Act to consider whether the transactions ought to be separately benchmarked or whether the transactional net margin method ought to be adopted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion Bench of this Court in the Assistant Commissioner of Income Tax and Another Vs. Vijay Television Private Limited and Another, in W.P.Nos.1327 to 1329 of 2014, dated 23.04.2018. The learned counsel for the petitioner further submits that this issue is also covered by the following decisions:- i. Turner International India Private Limited Vs. Deputy Commissioner of Income Tax Circle 25(2), 2017 SCC OnLine Del 8441 : (2017) 297 CTR 460. ii. JCB India Ltd. Vs. Deputy Commissioner of Income Tax and Another, 2017 SCC OnLine Del 10424 : (2017) 398 ITR 189. iii. Nokia India Private Limited Vs. Additional Commissioner of Income Tax, Judgment dated 07.09.2017, passed by the Delhi High Court in W.P.(C) No.3629 of 2017. iv. Additional Commissioner of Income Tax Vs. M/s. Nokia India Private Ltd., Order dated 14.05.2018, passed by the Hon'ble Supreme Court in S.L.P.(Civil) Diary No.7302 of 2018. v. Deputy Commissioner of Income Tax Vs. JCB India Ltd., Order dated 12.10.2018, passed by the Hon'ble Supreme Court in S.P.L.(Civil) Diary No.24312 of 2018. 11. Defending impugned order, learned counsel for the respondent, Income Tax Department subm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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