The ITAT Delhi, in ITA No. 1841/DEL/2020, adjudicated on various issues raised by DCM Shriram Industries Ltd against orders from the Commissioner of Income Tax (Appeals) related to the assessment years 2015-16 to 2017-18. The main contention involves transfer pricing adjustments of Rs. 9,70,87,302 to the arm’s length price of specified domestic transactions.
DCM Shriram Industries, engaged in manufacturing diverse products, transferred power generated from an eligible unit to non-eligible units. The Transfer Pricing Officer (TPO) applied an external Comparable Uncontrolled Price, leading to a substantial transfer pricing adjustment. This decision was contested up to the ITAT, which noted similar issues had been resolved in favour of the assessee in the past without appeal by the revenue.
The ITAT, after examining submissions and factual errors admitted by the Assessing Officer, decided to delete the controversial transfer pricing adjustments. The Tribunal emphasized that prior similar decisions should guide current judgments unless overturned or challenged effectively at higher judicial forums.
This ruling underscores the importance of consistency in judicial decisions and the need for the revenue service to adhere to its own non-appeal decisions in comparable cases. It also highlights the critical role of factual accuracy and honesty in the administration of tax law.
DCM Shriram Industries Ltd vs Addi. CIT on Transfer Pricing Adjustments – ITA No. 1841/DEL/2020
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