ERICSSON INDIA PVT. LTD.,NEW DELHI vs. JCIT, NEW DELHI

ITA 1093/DEL/2017Status: DisposedITAT Delhi22 May 2026AY 2012-1315 pages
AI SummaryAllowed

What were the facts?

The assessee, Ericsson India Pvt. Ltd., claimed expenses for Second Line Support (SLS) services received from its Associated Enterprises. The Transfer Pricing Officer (TPO) determined the arm's length price for these services to be NIL, leading to an adjustment. The Dispute Resolution Panel (DRP) upheld the TPO's action and directed disallowance under Section 37(1).

What did the Tribunal hold?

The Tribunal held that once a transaction or its components are covered under an Advance Pricing Agreement (APA), it is binding on both the Department and the assessee. Disallowing the expenditure under Section 37(1) on grounds of lack of business expediency would nullify the effect of the APA.

What were the issues?

Whether expenditure covered under an Advance Pricing Agreement (APA) can be disallowed under Section 37(1) on grounds of lack of business expediency. Whether the disallowance of intra-group services expenses is justified when an APA is in place.

Which sections of the Income-tax Act were involved?

Section 37(1),Section 92CA,Section 92CC,Section 143(3),Section 144C(3),Section 144C(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “I” BENCH, DELHI

Before: SHRI ANUBHAV SHARMA & SHRI NAVEEN CHANDRA

For Appellant: Adv. (Virtual)
Hearing: 25.03.2026Pronounced: 22.05.2026

PER ANUBHAV SHARMA, JM:

This appeal is preferred by the assessee against the order dated 22.12.2016 of the Ld. Joint Commissioner of Income Tax, Special Range-03, New Delhiu/s 143(3) r.w.s144C(3) of the Income Tax Act, 1961 with the P a g e | 2 Ericsson India Pvt. Ltd. (AY: 2012-13) direction of Dispute Resolution Panel -1, New Delhi dated 18.11.2016 of the Income Tax Act, 1961 u/s 144C(5) for AY: 2012-13. 2. Heard and perused the record. Ericsson India Private Limited (hereinafter referred as 'the Appellant' or 'EIL,' or 'the Company') is a company incorporated under the Indian Companies Act, 1956. EIL is a wholly owned subsidi

The order continues below.

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