COMMISSIONER OF INCOME TAX FARIDABAD vs. M/S BMW INDIA PVT LTD

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ITA/142/2015HC Punjab & HaryanaPHHC01109767201509 December 2021Bench: MR. JUSTICE AJAY TEWARI,MR. JUSTICE PANKAJ JAIN3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court observed that both parties were aggrieved by the same ITAT judgment but on different grounds. It noted that certain legal issues were pending before the Supreme Court. In these circumstances, the High Court deemed it appropriate to set aside the impugned order dated August 16, 2013, and remand the case back to the ITAT for a fresh decision on all aspects in accordance with the law. The parties were directed to appear before the Tribunal on December 20, 2021, or any other date fixed by the Tribunal. The appeal and cross-objections were disposed of accordingly. No specific findings were given on the merits of the issues raised.

What were the facts?

The Commissioner of Income Tax, Faridabad (appellant/revenue) filed an appeal against an order dated August 16, 2013, passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench. M/s BMW India Pvt. Ltd. (respondent/assessee) also filed cross-objections against the same ITAT order. The assessment year in question is 2008-09. The appeal and cross-objections were filed before the High Court of Punjab and Haryana at Chandigarh. The High Court noted that certain legal issues raised in the appeal were pending before the Supreme Court. The cross-objections raised specific questions regarding the ITAT's decision on advertising and marketing (AMP) expenditure being an international transaction and the application of the 'Bright Line Test'.

What were the issues?

1. Whether the ITAT erred in law by upholding the incurring of allegedly excessive expenditure on AMP as an International Transaction against the provisions under Section 92B of the Income Tax Act, 1961? (Assessee's contention: The ITAT erred in law. Revenue's contention: Not recorded). 2. Whether the ITAT erred in law in upholding the application of the “Bright Line Test” as a tool for calculating the arm's length price of the alleged International Transaction without complying with the Transfer Pricing provisions contained in the Act? (Assessee's contention: The ITAT erred in law. Revenue's contention: Not recorded). 3. Whether the Assessee (respondent-cross objector) herein has not filed any such or similar cross objection till date either before this Hon'ble Court or the Hon'ble Supreme Court of India? (This appears to be a statement by the assessee rather than a question for determination, but it is listed as a point raised in the cross-objections).

Which sections of the Income-tax Act were involved?

Section 92B

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 226 CM-6314-CII-2021 in/and ITA-142-2015 and XOBJC-186-CII-2015 (O&M) Decided on : December 09, 2021 The Commissioner of Income Tax, Faridabad ....Appellant VS M/s BMW India Pvt.Ltd. ....Respondent CORAM: HON'BLE MR. JUSTICE AJAY TEWARI

HON'BLE MR. JUSTICE PANKAJ JAIN Present: Mr. Tajender K.Joshi, Advocate for the appellant.(Department) Mr. Rohan Shan, Advocate Mr. Srisabari Rajan, Advocate and Mr. Alankar Narula, Advocate for the respondent.(Assessee) **** AJAY TEWARI, J.(Oral) CM-6314-CII-2021 1. This application has been filed for fixing an actual date of hearing in the main appeal. 2. For the reasons recorded in the application, the same is allowed and with the consent of both the parties, the main appeal is taken up on Board for hearing today itself. ITA-142-2015 and XOBJC-186-CII-2015 3. This appeal as well as the Cross-Objections have been filed against the order dated 16.8.2013 (Annexure A-11) passed by the Income Tax Appellate Tribunal, Delhi Bench “1” New Delhi in ITA No. 5354/DEL/2012 dated 16.8.2013 for the assessment year 2008-09. ANURADHA 2021.12.14 14:42 I attest to the accuracy and integrity of this document

CM-6314-CII-2021 in/and -2- ITA-142-2015 and XOBJC-186-CII-2015 (O&M) 4. In the appeal, certain legal issues have been raised and those in turn are pending before the Supreme Court in CA NO. 3954 of 2017. It has been stated that that the appeal in the Supreme Court has now been listed in January, 2022. Apart from that, Cross-Objections have been filed by the respondent-assessee wherein the following questions have been raised :- i Whether the ITAT erred in law by upholding the incurring of allegedly excessive expenditure on AMP is an International Transaction against the provisions under Section 92B of the Act. ii Whether the ITAT erred in law in upholding the application of the “Bright Line Test” as a tool for calculating the arm's length price of the alleged International Transaction without complying with the Transfer Pricing provisions contained in the Act ? iii That the Assessee (respondent-cross objector) herein has not filed any such or similar cross objection till date either before this Hon'ble Court or the Hon'ble Supreme Court of India.” 5. In this case, both the parties are aggrieved of the same judgment order albeit on different grounds. In these circumstances, we deem it appropriate to set aside the impugned order dated 16.8.2013 and remand the case back to the Tribunal for a fresh decision on all aspects in accordance with law. Parties through counsel are directed to appear before the Tribunal on 20.12.2021 or on any other date on which the Tribunal may require its presence. 6. Appeal as well as Cross-Objection stand disposed of. ANURADHA 2021.12.14 14:42 I attest to the accuracy and integrity of this document

CM-6314-CII-2021 in/and -3- ITA-142-2015 and XOBJC-186-CII-2015 (O&M) 7. Since the main case has been decided, the pending civil miscellaneous application, if any, also stands disposed of. (AJAY TEWARI)

JUDGE (PANKAJ JAIN) JUDGE December 09, 2021 anuradha Whether speaking/reasoned - Yes Whether reportable - No ANURADHA 2021.12.14 14:42 I attest to the accuracy and integrity of this document

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