ACIT-8(1)(1), MUMBAI, MUMBAI vs. RELIANCE LIFE SCIENCES PVT. LTD., NAVI MUMBAI

ITA 2978/MUM/2025Status: DisposedITAT Mumbai25 August 2025AY 2016-1724 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the TPO did not properly consider the financial health of the AEs and the appellant's contentions regarding the 'Other Method' for benchmarking. The TPO also failed to apply appropriate filters for comparable companies, making the transfer pricing adjustment unjustified.

What were the facts?

The assessee advanced a substantial loan to its associated enterprise (AE), RLSBV, which in turn lent it to RGMX for manufacturing operations. RGMX incurred significant losses, leading to requests for interest waivers from both RGMX to RLSBV and RLSBV to the assessee. The assessee subsequently waived the interest on the loan to RLSBV.

What were the issues?

Whether the transfer pricing adjustment for interest on loans advanced to AEs is justified, considering the poor financial health of the AEs and the appropriateness of the benchmarking method used.

Which sections of the Income-tax Act were involved?

Section 92CA,Section 92F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “J” BENCH MUMBAI

Before: SMT. BEENA PILLAI & SHRI GIRISH AGRAWAL

Hearing: 04.06.2025Pronounced: 25.08.2025

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal filed by Revenue is against the order of CIT (A)-57, Mumbai, vide order no. ITBA/APL/S/250/2024-25/1073776074(1), dated 27.02.2025 passed against the assessment order by Assistant Commissioner of Income-tax Circle 8(1)(1), Mumbai, u/s.143(3) r.w.s.144C(3) of the Income-tax Act, 1961 (hereinafter referred to as the "Act"), dated 22.01.2020 for Assessment Year 2016-17. 2 Reliance Life Sciences Pvt. Ltd. AY 2016-17 Grounds taken by the Revenue are reproduced as under:

“1. Whether on the facts and circumstances of the case and in law,

The order continues below.

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