TOYOTA BOSHOKU AUTOMOTIVE INDIA PRIVATE LIMITED,BIDADI vs. ASSESSMENT UNIT, INCOME TAX DEPARTMENT OR THE DCIT, CIRCLE - 7(1)(1), KORAMANGALA

ITA 1539/BANG/2024Status: DisposedITAT Bangalore09 May 2025Bench: SHRI WASEEM AHMED (Accountant Member), SHRI KESHAV DUBEY (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal found that the issue of royalty payment benchmarking to NIL was a significant dispute. However, the judgment also addresses other grounds related to foreign tax credit, dividend distribution tax, and ad-hoc interest, which were remanded to the AO for verification. The appeal was partly allowed for statistical purposes.

What were the facts?

The assessee paid royalty to its parent company for using proprietary technology. The TPO benchmarked this royalty payment to NIL, treating the assessee as a contract manufacturer with no independent market risk or exploitation. The DRP confirmed the TPO's action but directed verification of the royalty amount.

What were the issues?

Whether the assessee, a manufacturer of automotive components, should be treated as a contract manufacturer or a licensed manufacturer for royalty payment benchmarking. The appeal also involved disputes regarding foreign tax credit, dividend distribution tax credit, and ad-hoc interest levy.

Which sections of the Income-tax Act were involved?

Section 270A,Section 234A,Section 234B,Section 115P

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Income Tax Appellate Tribunal, ‘C’ BENCH, BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Appellant: Shri K.R Vasudevan, Advocate
For Respondent: Ms. Neera Malhotra, CIT (DR)
Hearing: 27.02.2025Pronounced: 09.05.2025

PER WASEEM AHMED, ACCOUNTANT MEMBER:

This is an appeal filed by the assessee against the assessment order dated 20/06/2024 in DIN No. ITBA/AST/S/143(3)/2024-25/ 1065988655(1) for the assessment year 2020-21. 2. The issues raised by the assessee in Ground Nos. 1 to 3 of the appeal are general in nature and therefore, the same do not require any specific adjudication. Accordingly, these grounds are dismissed as infructuous.

IT(TP)A No.1539/Bang/2024 3. The issue in Ground No. 29 relates to the levy of interest under section 234A and 234B of the Act. Since the levy of interest un

The order continues below.

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