PRINCIPAL COMMISSIONER OF INCOME TAX-7 vs. M/S UE DEVELOPMENT INDIA PVT LTD

PRINCIPAL COMMISSIONER OF INCOME TAX-7, BMTC COMPLEX, KORAMANGALA, BENGALURU.

THE COMMISSIONER OF INCOME TAX, CIRCLE -7(1)(1) BMTC COMPLEX, KORAMANGALA, BENGALURU.

The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 20.9.2019 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.1895/Bang/2017 for the assessment year 2010-11.

This Court, admitted the appeal on 22.7.2024 to consider the following substantial question of law: “Whether on the facts and circumstances of the case and in law, the Tribunal is right in law in holding that in mirror transactions, ALP adjustments cannot be done, i.e., if one transaction is treated as at Arm's Length, no adjustment can be done on the other related corresponding transaction of the associated enterprises without appreciating that this stand

Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue.

On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.

In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the question of law is