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Facts
The Revenue preferred an appeal against the order of the CIT(A) which had arisen from an assessment order passed under Section 143(3). The sole issue was the deletion of an amount related to the adjustment to the Arm's Length Price (ALP).
Held
The Tribunal noted that the international transaction exceeded Rs. 5 crores and was not referred to the TPO. Following the Supreme Court's decision in SG Asia Holdings (India) Pvt. Ltd., the Tribunal set aside the issue to the AO to refer the matter to the TPO for determining the ALP.
Key Issues
Whether the adjustment to the Arm's Length Price (ALP) for international transactions exceeding Rs. 5 crores should have been referred to the TPO when it was not initially done by the AO.
Sections Cited
143(3), 254(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘I’ BENCH, NEW DELHI
Before: SHRI ANUBHAV SHARMA, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-
This appeal by the Revenue is preferred against the order of the Ld. Commissioner of Income Tax (Appeals)-1, New Delhi [hereinafter referred to as the ‘Ld. CIT(A)’], dated 10.08.2015 arising out the assessment order dated 20.03.2014 passed u/s 143(3) of the Income Tax Act, 1961(hereinafter referred to as the “Act”] by the Deputy Commissioner of ITA No:- 6037/Del/2015 DCIT V M/s Arkadin confer India Pvt. Ltd Income Tax, Circle 2(1) (hereinafter referred to as ‘AO’) pertaining to Assessment Year (AY) 2011-12.
None appeared on behalf of the assessee; therefore, we decided to hear the case ex parte with the able assistance of the Ld. DR. We have carefully perused the material available on record.
The sole issue involved in the Revenue’s appeal is the deletion of an amount of Rs. 7,05,54,285/- on account of adjustment to the Arm’s Length Price (ALP). The ld DR explained that the Revenue had filed a Miscellaneous Application u/s 254(2) of the IT Act, 1961 arising out of the Tribunal order dated 20.01.2020 passed in AY 2011-12 in assessee’s own case, wherein the ITAT vide order dated 27.06.2025 was pleased to recall the said ITAT order on account of non-consideration of ratio of the Hon'ble Supreme Court in M/s SG Asia Holding (India) Pvt. Ltd. in Civil Appeal No.6144 of 2009, order dated 30.08.2018. The ratio of the hon’ble Supreme Court was that where the international transaction was above Rs.5 crores, same should have been referred to Id. TPO for determination of arm's length price of the international transaction and the Tribunal ought to have restored the issue to the file of AO, so that appropriate reference could be made to the TPO.
ITA No:- 6037/Del/2015 DCIT V M/s Arkadin confer India Pvt. Ltd 4. We have carefully perused the material available on record. The issue for adjudication is ascertaining of the Arm’s Length Price of international transactions. In the instant case, we find that the arm’s length adjustment in respect of the international transaction was not referred to the TPO even though the valuation of the international transactions exceeded Rs. 5 crores. We therefore, following the decision of the Hon’ble Supreme Court in the case of SG Asia Holdings (India) Pvt. Ltd (supra), set aside the issue to the file of the AO with a direction to refer the matter to the TPO for determining the ALP of the international transactions in accordance with law.
In the result, the appeal of the Revenue in ITA No:- 6037/Del/2015 is allowed for statistical purposes.
Order is pronounced in the Open Court on 18th March’ 2026.