Commissioner of Income Tax vs. M/s. India Trimmings Private Limited

PDF · subscribers
TCA/235/2022HC Madras15 October 2024Bench: Honourable Mr Justice R. SURESH KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal on the grounds that the matter was covered under the Low Tax Effect, as per Circular No. 9/2024 dated September 17, 2024. Consequently, the substantial questions of law that were admitted for consideration were kept open to be decided at a later point in time. The Court made no order as to costs. The judgment does not provide any finding on the merits of the two substantial questions of law concerning the ITAT's decision on the inclusion of a comparable entity and risk adjustment in the transfer pricing assessment.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, Corporate Circle 1, Coimbatore, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Madras 'D' Bench, Chennai, dated March 22, 2022. The ITAT's order was passed in ITA No.476/Chny/2016. The appeal concerns the assessment of M/s. India Trimmings Pvt. Ltd. for an unspecified assessment year. The core of the dispute involves transfer pricing adjustments made by the Transfer Pricing Officer (TPO) and directions issued by the Dispute Resolution Panel (DRP). The High Court admitted the appeal on substantial questions of law.

What were the issues?

The High Court had to decide two substantial questions of law: 1. Whether the ITAT erred in not considering facts regarding the Profit Level Indicator (PLI) of M/s. Ashnoor Textile Mill Ltd., brought on record by the TPO, and in concluding that the DRP's direction to include this entity as a comparable was not infirm. 2. Whether the ITAT erred in not considering facts presented by the TPO regarding the rejection of risk adjustment for personnel cost, and in holding that the DRP's direction to the TPO to decide the percentage of risk adjustment was not infirm. The Revenue contended that the matter is covered under the Low Tax Effect as per Circular No. 9/2024 dated September 17, 2024. The judgment does not record specific arguments from the assessee regarding the merits of the ITAT's decision on the transfer pricing issues.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

T.C.A.No.235 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15.10.2024 CORAM : THE HONOURABLE MR.JUSTICE R. SURESH KUMAR AND THE HONOURABLE MR.JUSTICE C. SARAVANAN T.C.A.No.235 of 2022 The Commissioner of Income Tax Corporate Circle 1, Coimbatore. .. Appellant Vs. M/s.India Trimmings Pvt. Ltd. 6/636, Pillaiappan Palayam Telugupalayam Post, Annur Coimbatore 641 653 PAN: AAACI 639N .. Respondent Prayer: Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order of Income Tax Appellate Tribunal, Madras “D”

Bench,

Chennai

dated

22.03.2022

passed

in I.T.A.No.476/Chny/2016. For the Appellant : Mr.Karthik Ranganathan Senior Standing Counsel For the Respondent : Mr.A.S.Sriraman JUDGMENT (Order of the Court was made by R.SURESH KUMAR, J.) The present tax case appeal was admitted on 10.08.2022 by this Court on the following substantial questions of law:- Page 1 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.235 of 2022 "1. Whether under the facts and circumstances of the case and in law, the ITAT was correct in not considering the facts about the Profit Level Indicator (LI) of the company M/s.Ashnoor Textile Mill Ltd. Brought on record by the Transfer Pricing Officer and concluding that there is no infirmity in the proceedings of the Dispute Resolution Panel directing that TPO to include the said entity as a comparable? 2. Whether under the facts and circumstances of the case and in the law, the ITAT was correct in not considering the facts brought on record by the TPO in rejection of Risk adjustment on account of personnel cost and holding that there is no infirmity in the order passed by the DRP directing the TPO to decide the percentage of risk adjustment?" 2. It is submitted by the learned Senior Standing Counsel appearing for the appellant Revenue that this matter is covered under the Low Tax Effect as per the recent Circular dated 17.09.2024, in Circular No.9/2024. Page 2 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.235 of 2022 3. Hence, this appeal stands dismissed, as covered under the low tax effect and the substantial questions of law arising in this appeal are kept open to be decided at the later point of time. There shall be no order as to costs. (R.S.K., J.) (C.S.N, J) 15.10.2024 Neutral Citation:Yes/No drm Page 3 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.235 of 2022 R. SURESH KUMAR, J. AND C. SARAVANAN

, J.

(drm) T.C.A.No.235 of 2022 15.10.2024 Page 4 of 4 https://www.mhc.tn.gov.in/judis

More judgments on Section 260-A

All 2,570 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →