STYRENIX PERFORMANCE MATERIALS LIMITED,VADODARA, GUJARAT vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1)(1), VADODARA, VADODARA, GUJARAT

ITA 1066/AHD/2026Status: DisposedITAT Chandigarh01 October 2026AY 2022-2314 pages
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What were the facts?

The assessee, Styrenix Performance Materials Limited, filed an appeal against the final assessment order dated January 31, 2026, passed by the Assistant Commissioner of Income Tax (ACIT) for Assessment Year 2022-23. This order was passed pursuant to directions from the Dispute Resolution Panel (DRP). The assessee's grounds of appeal primarily concerned a transfer pricing adjustment of Rs. 20,17,56,905/- made for intra-group services availed from its Associated Enterprises (AEs). Other grounds related to the adoption of total income from an initial intimation despite a subsequent rectification order, disallowance under Section 36(1)(va), depreciation adjustment, and short TCS credit. The assessee also challenged the validity of assessment proceedings and the timeliness of the assessment order, though these grounds were not pressed.

What did the Tribunal hold?

The Tribunal held that Grounds 1 and 2 were not pressed and were dismissed. Regarding Grounds 3 to 13 concerning the transfer pricing adjustment of Rs. 20,17,56,905/-, the Tribunal noted that an identical issue had arisen in the assessee's own case for AYs 2017-18 and 2018-19, where the Tribunal deleted the adjustments, a decision upheld by the Hon'ble Gujarat High Court. The High Court had observed that the TPO did not undertake the exercise under Rule 10AB before determining ALP at Nil and that the assessee had demonstrated receipt of India-specific services. The Tribunal also noted that a coordinate bench had followed these decisions for AY 2021-22. Finding the facts and circumstances materially identical for the current year and in the absence of distinguishing features from the Revenue, the Tribunal directed the deletion of the transfer pricing adjustment, allowing Grounds 3 to 13. For Grounds 14 to 17, concerning the adoption of total income, the Tribunal found the assessee's contention supported by the rectification order and directed the Assessing Officer to give effect to the rectification order dated August 26, 2024, allowing Grounds 14 and 17. For Grounds 15 and 16, regarding the disallowance under Section 36(1)(va) and depreciation adjustment, the Tribunal found the disallowance unsustainable due to timely payment and directed verification for the depreciation adjustment, allowing Grounds 15 and 16. The Tribunal did not record any specific findings or decisions on Grounds 7 and 8 as they were not discussed in the provided excerpt.

What were the issues?

1. Whether the assessment proceedings conducted by the Assessing Officer violated the statutory mandate of Section 144B of the Income-tax Act, 1961, rendering the assessment bad in law? (Assessee's contention: Yes, the proceedings were in violation. Revenue's contention: Not recorded). 2. Whether the final assessment order was issued beyond the time limit prescribed under Section 153 of the Act, making it barred by limitations? (Assessee's contention: Yes, it was beyond the time limit. Revenue's contention: Not recorded). 3. Whether the aggregate transfer pricing adjustment of Rs. 20,17,56,905/- made in respect of intra-group services availed from AEs was erroneous in fact and law? (Assessee's contention: The adjustment was erroneous as the AO/TPO/DRP disregarded the assessee's benchmarking approach, rejected the tested party without proper reasoning, made adjustments despite Section 92C(3) conditions not being met, ignored explanations and evidence, wrongly classified services as shareholder services, made adjustments on assumptions, rejected the assessee's Benefit Test Documentation, and applied the 'Other Method' to determine ALP at NIL, following previous years' DRP findings despite contrary High Court and ITAT rulings. Revenue's contention: Supported the orders of the authorities below). 4. Whether the Assessing Officer erred in adopting the total income from the initial intimation under Section 143(1) instead of the rectified income under Section 154? (Assessee's contention: Yes, the AO inadvertently adopted the original income. Revenue's contention: Not recorded). 5. Whether the disallowance of Rs. 19,337/- under Section 36(1)(va) was justified? (Assessee's contention: No, there was no delay in payment. Revenue's contention: Not recorded). 6. Whether the adjustment of Rs. 50,21,716/- on account of depreciation as per ICDS V was justified? (Assessee's contention: The difference was already assessed to tax. Revenue's contention: Not recorded). 7. Whether the granting of short TCS credit of Rs. 993/- was justified? (Assessee's contention: No, it was reflected in Form 26AS. Revenue's contention: Not recorded). 8. Whether the initiation of penalty proceedings under Section 270A was justified? (Assessee's contention: No, there was no justification for initiating penalty under Section 270A(6). Revenue's contention: Not recorded).

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 144B,Section 153,Section 92D,Section 92C(3),Section 92C,Section 139(1),Section 143(1),Section 154,Section 36(1)(va),Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

For Appellant: Ms. Amrin Pathan, AR
For Respondent: Shri R.V Aroon Prasaad, CIT.DR
Hearing: 10.08.2026Pronounced: 01.10.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT:

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This appeal has been preferred by the assessee against the final assessment order dated 31.01.2026 passed by the Assessing Officer u/s. 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income-tax Act, 1961 (“the Act” in short), pursuant to the directions of the learned Dispute Resolution Panel-2, Mumbai-1 (“DRP” in short) dated 05.12.2025, for the Assessment Year 2022-23. 2. The Assessee has raised the following grounds of Appeal:- “Validity of the order:

1.

In law, on facts and in the circumstances of the case, the impugned assessment proceedings conducted by the Assessment Unit, Income

The order continues below.

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