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Facts
The assessee, Cisco Systems (India) Pvt. Ltd., filed an appeal against the assessment order for AY 2020-21, primarily contesting transfer pricing adjustments. The assessee argued that unilateral and bilateral Advanced Pricing Agreements (APAs) entered into with the CBDT should have been given effect to, which would negate the adjustments.
Held
The Tribunal held that the adjustments concerning transfer pricing matters did not survive in view of the APAs. The AO was directed to delete the addition of Rs.53,40,15,927/- after verifying the APAs and modified returns. Ground No. 6 regarding advance tax credit was also allowed after verification of the challan.
Key Issues
Whether transfer pricing adjustments are valid when the assessee has entered into unilateral and bilateral Advanced Pricing Agreements (APAs)? Whether credit for advance tax paid should be granted?
Sections Cited
143(3), 144B, 234A
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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI & SHRI PRAKASH CHAND YADAV
Per Prashant Maharishi, Vice President:
IT(TP)A No. 1891/Bangalore/2024 is filed by Cisco Systems (India) Pvt. Ltd., (the assessee/appellant) for Assessment Year 2020 – 21 against the Assessment Order passed under section 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (The Act), dated 29/07/2024, by the Assessment Unit (the learned Assessing Officer) of the assessee at Rs.1344,16,04,290/- against the returned income of Rs.1192,60,35,990/-. In this assessment, the transfer pricing adjustment was retained of Rs.53,40,15,927/- after the direction of the learned Dispute Resolution Panel (learned DRP), Bangalore, dated 18.06.2024.
Assessee is aggrieved and has preferred this appeal raising grounds against transfer pricing matters. As per ground Nos.1-4, assessee contends that there
IT(TP) A No.1891/Bang/2024
Page 2 of 3 are 2 adjustments made on account of transfer pricing, but the unilateral advanced pricing agreement and bilateral advanced pricing agreement entered into by the assessee with the Central Board of Direct Taxes have not been granted effect of.
Contesting these grounds, the learned Authorized Representative submitted copy of the bilateral advanced pricing agreement dated 21.07.2023 and unilateral advanced pricing agreement dated 12.01.2024 entered between the assessee and CBDT along with the modified return of income filed on 19.10.2023 in compliance with bilateral advanced pricing agreement and on 29.04.2024 in compliance to unilateral advanced pricing agreement. Therefore, it was submitted that the transfer pricing adjustments cannot survive. Copies of APA and Modified returns are submitted in the paper book.
On these grounds, the learned CIT(DR) also agreed that in view of unilateral advanced pricing agreement and bilateral advanced pricing agreement, the addition with respect to the transfer pricing matters does not survive.
In view of the above facts, we direct the learned AO to delete the addition of Rs.53,40,15,927/-, after verification of the advanced pricing agreements and modified return. Accordingly, ground Nos.1 to 4 are allowed subject to above direction.
Ground No.5 was not pressed and hence dismissed.
Ground No.6 is with regard to non-consideration of the fact that assessee has paid advance tax amounting to Rs.35 Crores and credit for the same was not IT(TP) A No.1891/Bang/2024
Page 3 of 3 granted. The learned Authorized Representative has furnished challan of Rs.35 Crores which was paid on 11.12.2019 for the impugned Assessment Year 2020-21.
After hearing both the parties, we direct the learned Assessing Officer to verify the same and grant credit of the above sum as advance tax after verification of challan. Accordingly, ground No.6 of the appeal is allowed.
Ground Nos.7 and 8 are with respect to levy of interest under section 234A of the Act, same is consequential in nature, and therefore, same are dismissed.
In the result, appeal of the assessee is partly allowed for statistical purposes.
Pronounced in the open court on the date mentioned on the caption page.