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Income Tax Appellate Tribunal, B Bench,
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HC-KAR NC: 2025:KHC:43159-DB ITA No. 104 of 2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF OCTOBER, 2025 PRESENT THE HON'BLE MR. JUSTICE B M SHYAM PRASAD AND THE HON'BLE MR. JUSTICE T.M.NADAF INCOME TAX APPEAL NO. 104 OF 2025
BETWEEN:
BOSCH AUTOMOTIVE ELECTRONICS INDIA PRIVATE LIMITED INDIA PRIVATE LIMITED, C/O BOSCH LTD. BUILDING NO. 703, ELECTRONIC CITY, SO NAGANATHAPURA, BANGALORE, 560100 REPRESENTED HEREIN BY ITS COMPANY SECRETARY.
…APPELLANT (BY SRI. T. SURYANARAYANA., SENIOR ADVOCATE FOR MS. TANMAYEE RAJKUMAR.,ADVOCATE) AND:
DEPUTY COMMISSIONER INCOME TAX CIRCLE 2(1)(1), BMTC BHAVAN, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BANGALORE - 560034.
THE PRINCIPAL
Digitally Signed by REKHA R Location : High Court of Karnataka
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HC-KAR NC: 2025:KHC:43159-DB ITA No. 104 of 2025
COMMISSIONER OF INCOME TAX. BMTC BHAVAN, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BANGALORE - 560034.
…RESPONDENTS
(BY SRI.Y.V. RAVIRAJ., ADVOCATE)
THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO a) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE; b) ALLOW THE APPEAL AND SET ASIDE THE ORDER DATED 16.12.2024 PASSED BY THE TRIBUNAL IN IT(TP)A NO. 1473/BANG/2024, FOR ASSESSMENT YEAR 2020-2021.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD and HON'BLE MR. JUSTICE T.M.NADAF
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HC-KAR NC: 2025:KHC:43159-DB ITA No. 104 of 2025
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE B M SHYAM PRASAD)
The appellant is aggrieved by the order dated 16.12.2024 in IT (TP) A No.1473/Bang/2024 on the file of the Income Tax Appellate Tribunal, 'B' Bench, Bengaluru [for short, "the Tribunal"]. The appellant has filed its appeal with the Tribunal calling in question the final assessment order dated 11.06.2024 relevant to the Assessment Year 2020-21. The appellant, while raising multiple grounds on the Transfer Pricing Adjustments and the Corporate Tax Adjustments, has contended that the Transfer Pricing Officer [TPO] could not have doubted that it had received services and benefits from its Associated Enterprises [AE], and the appellant, without prejudice to its different contentions, has asserted that it has deducted applicable taxes at source on the payments made to the AE and these Enterprises have also filed their return of income offering the same to
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HC-KAR NC: 2025:KHC:43159-DB ITA No. 104 of 2025
tax in India and that the Revenue has accepted the same without demur.
The Tribunal, in directing a remand, has observed that the documents do not demonstrate that the appellant had indeed received services and benefits from its AE and that the email correspondences may not be conclusive. The Tribunal has also recorded that when queried by it, the learned counsel for the appellant submitted that it would file all documents to justify its case that it had received services and benefits from its AE. Further, the Tribunal has observed that the appellant has indeed contended that no Transfer Pricing Adjustments could be made when it is undisputed that the AE has offered to taxes the amounts received but only to observe that this would be one of the guiding factors and that on remand all these aspects and the other aspects could be considered.
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HC-KAR NC: 2025:KHC:43159-DB ITA No. 104 of 2025
Sri T. Suryanarayana, the learned Senior counsel for the appellant, submits that it is trite that the Tribunal is the last fact finding authority which is empowered to examine the documents placed, that the Tribunal must not exercise its powers to remand in a routine matter and that such power must be used sparingly as an exception only when the facts warrant such course of action. The learned Senior Counsel argues that if the Tribunal remands proceedings routinely despite all materials being on record, it would only contribute to the longevity of a dispute; and that in the present case, the appellant, despite all matters being diligently perused, will have to re-agitate the entire issue.
Sri T. Suryanarayana, as regards, the proposition that the Tribunal must not routinely remand the matters, relies upon the following two decisions:
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HC-KAR NC: 2025:KHC:43159-DB ITA No. 104 of 2025
• Dell International Services India (P) Ltd. v. Assistant Commissioner of Income Tax, Circle 11(1), Bangalore - [2017] 88 taxmann.com 451 (Karnataka).
• M/s. Philips India Ltd. v. The State of Karnataka - S.T.R.P.No.297/2018 [disposed of on 09.04.2021]
The learned Senior Counsel canvasses that therefore the substantial question of law would be whether the Tribunal could have, in the facts and circumstances of the present case, interfered with the impugned Assessment Order dated 11.06.2024 only to remand the proceedings for reconsideration.
Sri Y.V. Raviraj, the learned Senior Standing Counsel for the Revenue, is heard on the afore question, which is admitted for due consideration. This Court must first refer to the proposition that unnecessary orders of remand give longevity to an unwarranted litigation as emphasized by a Co-ordinate Bench of this Court in Dell
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HC-KAR NC: 2025:KHC:43159-DB ITA No. 104 of 2025
International Services India (P) Ltd. vs. Assistant Commissioner of Income Tax [supra] observing that this proposition is emphasized by another Co- ordinate Bench of this Court in M/s. Phillips India P.L. India Ltd. vs. State of Karnataka and others.
"The jurisdiction of the Tribunal, being a last fact- finding authority, empowers it to examine the documents placed by the assessee to support its claim. It is settled law that remand is not a power to be exercised routinely and should be used sparingly as an exception only when the facts warrant such a course of action. When the materials are available on record, the Tribunal ought to have arrived at a conclusion rather than further remanding the matter back to the Assessing Officer that too, after giving a positive finding that the method adopted by the assessee is on a scientific and reasonable basis.
On behalf of the appellant, a synopsis of arguments is filed not just on the Transfer Pricing Adjustments but also on the Corporate Tax Adjustments. On the Transfer Pricing Adjustments, the submissions are as follows.
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HC-KAR NC: 2025:KHC:43159-DB ITA No. 104 of 2025
• No Transfer Pricing Adjustments could have been made in respect of payments made towards intra group services, by benchmarking the same separately, since there is no shifting of profits given that the AEs have offered the receipts in their hands to tax in India.
• Segregated benchmarking cannot be done once the TPO has accepted the aggregated benchmarking of the manufacturing and trading segments, which includes the costs pertaining to the intra group services availed by the Appellant.
• The TPO cannot question receipt of services and benefits that accrue from the services.
• The TPO has not applied any method prescribed under the Act to benchmark the transaction; and
• Without prejudice and in any event, the Appellant has demonstrated receipt of services.
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HC-KAR NC: 2025:KHC:43159-DB ITA No. 104 of 2025
It is obvious from the above that the appellant has called in question the final assessment order dated 11.06.2024 specifically contending that because the AE has offered the receipts to tax, there was no jurisdiction for such adjustments and that once the TPO has accepted the aggregated benchmarking of the manufacturing and trading segments, it could not have adopted segregated benchmarking. This is besides its case on the TPO's jurisdiction to go into the question of receipts of services and benefits. It is only as an alternative argument, it is presented on behalf of the appellant that it can demonstrate that it has received services from the AE.
The Tribunal being the last fact-finding authority should have examined the questions presented in the factual matrix, and the disposal of the appeal on an alternative ground, has only added longevity to the litigation. In this context, this Court
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HC-KAR NC: 2025:KHC:43159-DB ITA No. 104 of 2025
must observe that it is placed on record before this Court that all the documents necessary to justify the appellant's case that the deductions are made under Section 192 of the Act are brought on record. The appellants contend that the documents as placed before the Tribunal are as follows.
• Signed financial statement for financial year ('FY') 2019-20.
• Transfer Pricing Documentation (TP Report/TP Documentation') for FY 2019-20.
• Relevant agreements in respect of international transactions. • Computation of total income for FY 2019-20. Tax return for FY 2019-20.
• Tax audit report for FY 2019-20.
• Accountant's Report in Form 3CEB for FY 2019- 20; and
• Assessee's response to the show cause notice ("SCN") issued by the Ld. TPO and reply to various queries raised during the assessment proceedings."
In the light of the afore, the substantial question admitted for consideration is answered in favour of the appellant and the following:
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HC-KAR NC: 2025:KHC:43159-DB ITA No. 104 of 2025
ORDER [a] The appeal is allowed and the Tribunal's impugned order dated 16.12.2024 in IT(TP)A No.1473/Bang/2024 [Annexure-A] is quashed and the proceedings are restored to the Tribunal for decision on merits in an expedited manner preferably within six [6] months from the date of receipt of this order.
[b] It is needless to observe that all contentions on merits are left open to be considered by the Tribunal.
Sd/- (B M SHYAM PRASAD) JUDGE
Sd/- (T.M.NADAF) JUDGE
SA ct:sr