TATA MOTORS EUROPEAN TECHNICAL CENTRE PLC,MUMBAI vs. DCIT (IT) 4(1)(2), MUMBAI

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ITA 850/MUM/2017Status: DisposedITAT Mumbai12 September 2018AY 2012-133 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the issue of comparables had become academic as no transfer pricing adjustment was made. While acknowledging past favorable decisions on comparables, the Tribunal dismissed the ground without delving into the merits.

What were the facts?

The assessee challenged the rejection of foreign companies as comparables for transfer pricing adjustments. However, due to directions from the Dispute Resolution Panel (DRP), no transfer pricing adjustment ultimately remained in the final assessment order.

What were the issues?

Whether foreign companies selected as comparables for transfer pricing benchmarking were appropriate, and whether the issue was rendered academic due to subsequent DRP directions.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “K”, MUMBAI

Before: Shri Saktijit Dey & Shri Manoj Kumar Aggarwal

For Appellant: Shri Srihari M Iyer
For Respondent: Shri Rignesh Das & Shri Jayant Kumar
Hearing: 06.09.2018Pronounced: 12.09.2018

O R D E R Per Saktijit Dey, Judicial Member

This appeal by the assessee is directed against the final assessment order, dated 30.11.2016, passed u/s. 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961, for the assessment year 2012-13, in pursuance to the directions of the Dispute Resolution Panel (2) (DRP), Mumbai.

2.

In ground no.1 assessee has challenged the rejection of foreign companies selected as comparables by the assessee for benchmarking the international transactions with its Associated Enterprises (AE). At the outset, learned AR submitted that in A.Y. 2008-09, 2009-10 and 2010-11, the Tata Motors European Technical Centre Plc Tribunal has decided the issue in favour of the assessee. However, he submitted the issue has become academic in the impugned assessment year, since, by virtue of the directions of DRP with regard to other facets of transfer pricing adjustment, ultimately no addition on account of transfer pricing adjustment has been made in the final assessment order. Thus, he expressed his intention not to press the ground raised. The learned DR submitted, since, in the final assessment order no addition on account of transfer pricing adjustment has been made, the issue in this ground is academic in nature hence, not required to be decided.

3.

We have considered rival contentions and perused material on record.

We find, though, grounds relating to this issue were raised before the DRP, however, the DRP did not decide the issue upon considering the fact that on the basis of its directions no transfer pricing adjustment survives. Thus, in essence, the issue raised in this ground is of mere academic importance.

Therefore, there is no need to delve into the issue. Suffice to say, the contention of the assessee that the Tribunal has accepted the selection of foreign comparables in A.Ys. 2008-09 and 2009-10 in ITA 7630/Mum/2012 and ITA 1698/Mum/2014, order dated 22.12.2014, is found to be correct.

Therefore, in view of the aforesaid decision of the Tribunal, the issue raised in this ground is kept open for decision, if need be, in future. With the aforesaid observation this ground is dismissed.

Tata Motors European Technical Centre Plc

4.

Ground no.2 raised by the assessee is relating to incorrect adjustments of refund. At the outset, learned AR submitted that in the meanwhile the Assessing Officer has rectified the mistake and granted correct refund to the assessee. Hence, this ground has become infructuous. In view of the aforesaid submissions of the learned AR this ground is dismissed.

5.

In the result, assessee’s appeal is dismissed.

Order pronounced in the open court on this day of 12th September 2018.

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