NEXTEER AUTOMOTIVE INDIA PRIVATE LIMITED ,BENGALURU vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5(1)(1), BENGALURU

ITTPA 1808/BANG/2024Status: DisposedITAT Bangalore12 December 2024AY 2020-217 pages
AI SummaryRemanded

What were the facts?

The assessee, Nexteer Automotive India Private Limited, is engaged in manufacturing and exporting automotive components and providing software development services. For Assessment Year 2020-21, the assessee filed its return of income. During assessment, the case was referred to the Transfer Pricing Officer (TPO) due to international transactions with an Associated Enterprise (AE). The TPO made an upward adjustment of Rs. 6,55,76,380/- for intra-corporate services and royalty. The Assessing Officer (AO) also disallowed deductions under Section 10AA for the SEZ unit and Section 80JJA for the manufacturing unit. The Dispute Resolution Panel (DRP) sustained the additions for intra-corporate services and royalty, and the denial of Section 10AA deduction, but directed the AO to allow Section 80JJA deduction if conditions were met. The AO finalized the assessment, sustaining the disallowances.

What did the Tribunal hold?

The Tribunal held that the DRP's and TPO's view that the assessee failed to derive any benefit from intra-group services is not tenable, citing the Delhi High Court decision in EKL Appliances. Regarding the rendition of services, the assessee's counsel undertook to produce all relevant documentary evidence. For the deductions under Sections 10AA and 80JJA, the assessee placed additional evidence on record, to which the revenue did not object. Therefore, the Tribunal decided that these issues require fresh consideration by the AO. Consequently, all these issues (disallowance of payments to AE for services, and Sections 10AA and 80JJA) were remitted to the AO for fresh adjudication. Regarding the royalty issue (Ground No. 9), the Tribunal found no force in the assessee's arguments and dismissed this ground.

What were the issues?

1. Whether the Tribunal had to decide if the assessee had provided sufficient documentary evidence for the rendition of intra-group services by its AE, and if the DRP correctly dismissed the assessee's contention that these services were at arm's length, as argued by the assessee and the revenue. 2. Whether the Tribunal had to decide on the disallowance of royalty payments amounting to Rs. 18,89,961, as argued by the assessee and the revenue. 3. Whether the Tribunal had to decide on the denial of deduction under Section 10AA of the Act in respect of the SEZ unit, with the assessee arguing it was not formed by splitting up or restructuring an earlier unit, and the revenue relying on the authorities below, as argued by the assessee and the revenue. 4. Whether the Tribunal had to decide on the denial of deduction under Section 80JJA of the Act, with the assessee contending it did not receive a proper opportunity of being heard and has filed additional evidence, and the revenue relying on the authorities below, as argued by the assessee and the revenue.

Which sections of the Income-tax Act were involved?

Section 10AA,Section 80JJA,Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE

Before: SHRI WASEEM AHMED & SHRI PRAKASH CHAND YADAV

Hearing: 09.12.2024Pronounced: 12.12.2024

PER PRAKASH CHAND YADAV, JUDICIAL MEMBER:

Present appeal of the assessee is arising from the order of AO dated 25.7.2024 having DIN No. ITBA/AST/S/143(3)/2024- 25/1067035950(1).

2.

Brief facts of the case are that Nexteer Automotive India Private Limited (hereinafter referred to as "Nexteer India' or "the Company" or "the Assessee") was incorporated in February 2008, as a private limited company and has its registered office in Bangalore. Nexteer India is engaged in the business of manufacture and export of driveline and steering related automotive components (her

The order continues below.

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