Case Number: ITA 525/DEL/2019
Appellant: Sona BLW Precision Forgings Ltd., New Delhi
Respondent: Addl. CIT, Special Range-8, New Delhi
Assessment Year: 2013-14
Result: 2013-14
Case Filed on: January 24, 2019
Order Type: Final Tribunal Order
Date of Order: July 14, 2023
Pronounced on: July 14, 2023
The case ITA 525/DEL/2019 involves Sona BLW Precision Forgings Ltd., New Delhi, as the appellant and the Additional Commissioner of Income Tax (Addl. CIT), Special Range-8, New Delhi, as the respondent. This case pertains to the assessment year 2013-14 and addresses issues related to upward transfer pricing adjustment and corporate guarantee commission. The appeal was filed on January 24, 2019, and the final order was pronounced on July 14, 2023.
Sona BLW Precision Forgings Ltd., engaged in the business of manufacturing precision forged bevel gears and synchronizer rings used in the automobile industry, filed its return of income for the assessment year 2013-14 declaring an income of INR 28,64,70,841. The return was later revised to INR 28,70,84,296 on March 20, 2015. The case was selected for scrutiny under the Computer Aided Scrutiny Selection (CASS) system, and statutory notices were issued accordingly.
During the scrutiny, it was noted that the assessee had undertaken international transactions, leading to a referral to the Transfer Pricing Officer (TPO) for determining the Arms’ Length Price (ALP). The TPO proposed an adjustment of INR 1,06,66,002 against the value of international transactions. The assessee did not file any objections before the Dispute Resolution Panel (DRP), and the Assessing Officer (AO) consequently made an addition of INR 1,06,66,002, assessing the total income at INR 29,77,50,298.
The appellant, Sona BLW Precision Forgings Ltd., raised the following grounds of appeal:
The tribunal reviewed the facts and the appellant’s submissions. It was noted that in previous assessment years under similar circumstances, the Co-ordinate Bench had directed the AO to apply the Comparable Uncontrolled Price (CUP) method and restored the matter for fresh determination. Following this precedent, the tribunal decided to restore the issue to the AO for reassessment in accordance with the CUP method, ensuring an adequate opportunity for the assessee to be heard.
In the final judgment, the tribunal allowed the appeal for statistical purposes, directing the AO to reassess the issue based on the CUP method. The judgment emphasized the need for consistency and judicial discipline, adhering to the decisions made in similar cases for previous assessment years.
The case ITA 525/DEL/2019 highlights the complexities involved in transfer pricing adjustments and the application of appropriate benchmarking methods. The tribunal’s decision to restore the matter to the AO for reassessment underscores the importance of consistency and thorough examination of facts in transfer pricing cases. The outcome of this case will likely serve as a reference for similar cases in the future, contributing to the evolving jurisprudence in transfer pricing law.
Order pronounced in the open Court on July 14, 2023, by the members of the tribunal:
[B.R.R. KUMAR]
ACCOUNTANT MEMBER
[KUL BHARAT]
JUDICIAL MEMBER
Copy forwarded to:
//By Order//
Assistant Registrar, ITAT, Delhi Benches, New Delhi
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