BORGWARNER EMISSIONS SYSTEMS INDIA PRIVATE LIMITED,NEW DELHI vs. DCIT, CIRCLE-4(2), DELHI

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ITA 2015/DEL/2022Status: DisposedITAT Delhi29 August 2024AY 2013-14Bench: SHRI PRADIP KUMAR KEDIA (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)41 pages
AI SummaryAllowed

What did the Tribunal hold?

The tribunal held that the factum of rendering of services by the Associated Enterprises (AEs) was proved, and the principle of consistency was violated as the AO deviated from previous years' orders without proper justification. The tribunal also found merit in the assessee's contention regarding the incorrect computation of the Arm's Length Price (ALP) for royalty payments.

What were the facts?

The assessee, Borgwarner Emissions Systems India Private Ltd., challenged additions made by the Assessing Officer (AO) concerning transfer pricing adjustments for Business Support Services (BSS), Technical Support Services (TSS), and Royalty payments for AY 2013-14. This was the second round of litigation before the tribunal.

What were the issues?

The key issues were whether the services (BSS and TSS) were actually availed, whether transactions should be aggregated or segregated for benchmarking, and whether the ALP for royalty was correctly determined, considering consistency with prior years and the inclusion of landed costs.

Which sections of the Income-tax Act were involved?

Section 92CA,Section 271(1)(c),Section 234A,Section 234B,Section 234C,Section 234D,Section 92F,Section 92C

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Income Tax Appellate Tribunal, DELHI BENCH “I” DELHI

Before: SHRI PRADIP KUMAR KEDIA & SHRI NARINDER KUMAR

For Appellant: Shri Rohit Tiwari, Advocate
For Respondent: Shri Rajesh Kumar, CIT(DR)

Result

58.

In view of the above discussion and findings, the impugned assessment based on the observations and findings recorded by Ld. TPO and by Ld. DRP deserves to be set aside.

59.

Consequently, this appeal is allowed. 40 File be consigned to the record room, after the needful is done by the office.

Order pronounced in the open Court on 29/08/2024

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