Loading judgment…
Facts
The assessee, a resident company, divested its India Support Services Business to a domestic associated enterprise, Lionheart Shipping Private Limited, via a slump sale. The Assessing Officer (AO), following directions from the Dispute Resolution Panel (DRP) and a reference to the Transfer Pricing Officer (TPO), made a significant transfer pricing adjustment. The assessee contested that the transaction between two Indian resident entities could not be an international transaction.
Held
The Tribunal ruled that the transaction between two resident associated enterprises does not qualify as an 'international transaction' under Section 92B(1) as it requires at least one non-resident party. It also does not fall under Section 92B(2) as it was not a transaction with a person other than an associated enterprise. Consequently, the transfer pricing adjustment was held to be without jurisdiction and was deleted.
Key Issues
Whether a transaction between two domestic associated enterprises constitutes an 'international transaction' or a 'deemed international transaction' under Section 92B of the Income-tax Act, 1961, for transfer pricing purposes.
Sections Cited
143(3), 144C(13), 144B, 92B, 92C, 153
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “J” BENCH MUMBAI
Before: SHRI AMIT SHUKLA & SHRI MAKARAND VASANT MAHADEOKAR
PER MAKARAND VASANT MAHADEOKAR, AM: This common order disposes of an appeal filed by the assessee for A.Y. 2022–23, arising out of the final assessment order dated 23.10.2025, passed by the Assessing Officer under section 143(3) read with sections 144C(13) and 144B of the Income-tax Act, 1961[hereinafter referred to as “the Act