ACIT, CIRCLE-14(2), NEW DELHI vs. KNOWLEDGE INFRASTRUCTURE SYSTEMS PVT. LTD., NEW DELHI

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ITA 1048/DEL/2018Status: DisposedITAT Delhi08 April 2021AY 2013-143 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the revenue's appeal. This was because the assessee had entered into an Advance Pricing Agreement (APA) which covered the impugned assessment year, and the revised return and Form 3CEF were accepted by the AO.

What were the facts?

The revenue appealed against the CIT(A)'s order which partly allowed the assessee's appeal, reducing transfer pricing adjustments for interest on loan and corporate guarantee. The assessee is engaged in coal import and power trading.

What were the issues?

Whether the CIT(A)'s order reducing transfer pricing adjustments for interest on loan and corporate guarantee was correct, and the impact of a subsequent Advance Pricing Agreement on the appeal.

Which sections of the Income-tax Act were involved?

Section 92CA,Section 92CC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “I-2”: NEW DELHI

Before: SHRI KULDIP SINGH & SHRI PRASHANT MAHARISHI

For Appellant: Shri Dhiraj Jain, Sr. DR
For Respondent: Shri R. S. Shinshvi, Adv, Shri Dhiraj Jain, Sr. DR
Hearing: 16/02/2021Pronounced: 08/04/2021

O R D E R PER PRASHANT MAHARISHI, A. M.

1.

This appeal is filed by the revenue against the order of the ld CIT(A)-44, new Delhi dated 30.11.2017 for the Assessment Year 2013-14. The ld AO has raised the following grounds of appeal:- “(i) Whether in the facts and circumstances of the case, whether the order of Ld. CIT(A) is perverse in giving relief to the assessee by reducing the rate of Interest from L1BOR+400(4.96231%) to 2.11% for the transaction pertaining to „Interest on Loan to AE‟ by completely ignoring the direction of Hon‟ble High Court in the case of M/s Cotton Naturals (I) (P) Ltd. and various tribunal judgments? (ii) Whether in the facts and circumstances of the case, whether the order of Ld. CIT(A) is perverse in giving relief to the assessee by reducing the rate of Interest from LIBOR+400(4.96231%) to 2.1 for the transaction pertaining to „Interest on Loan to AE‟ by relying on the TPO‟s stand in previous AY, without appreciating the fact there is no res judicata in income tax proceedings and in the process neglected the judgement of various courts and tribunals? (iii) Whether in the facts and circumstances of the case, whether the order of Ld. CIT(A) is perverse, deleting the adjustment made by the TPO regarding the Corporate Guarantee, by allowing Corporate Guarantee fees at mere 0.25% instead of the 1.30% levied by the TPO, whereas if the Safe Harbour Rules laid down under Income Tax Rules were to be followed, the assessee should have had accept the fees at 2%? (iv) Whether in the facts and circumstances of the case, whether the order of Ld. C1T(A) is perverse deleting the adjustment made by the TPO regarding the Corporate Guarantee without appreciating the fact that there is no res judicata in income tax Page | 1

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