RALLIS INDIA LIMITED ,MUMBAI vs. THE ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 8(1)(1), MUMBAI

ITA 4210/MUM/2024Status: DisposedITAT Mumbai13 December 2024AY 2020-2112 pages
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What did the Tribunal hold?

The Tribunal held that the Transfer Pricing adjustment was uncalled for, as the assessee demonstrated net benefits from sales through its AE, considering working capital costs and risk factors. Regarding Section 14A, the Tribunal noted the assessee's substantial interest-free funds and the AO's failure to record satisfaction for disallowance, allowing the appeal on this ground.

What were the facts?

The assessee, Rallis India Limited, engaged in agrochemicals, made sales to its Associated Enterprise (AE), Tata Chemicals International Pte Ltd (TCIPL), under a 'Bill To Ship To Model'. The Assessing Officer (AO) and Dispute Resolution Panel (DRP) made a Transfer Pricing (TP) adjustment, disallowing a significant amount. The assessee also challenged disallowances under Section 14A and the denial of weighted deduction under Section 35(2AB).

What were the issues?

Whether the Transfer Pricing adjustment made by the authorities was justified, considering the benefits of sales through an AE, and whether the disallowance under Section 14A was valid without proper satisfaction from the AO.

Which sections of the Income-tax Act were involved?

Section 92CA,Section 14A,Section 35(2AB)

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Income Tax Appellate Tribunal, “J” BENCH, MUMBAI

Before: SHRI NARENDRA KUMAR BILLAIYA, HONBLE & SHRI RAJ KUMAR CHAUHAN, HONBLE

For Appellant: Shri M.M. Golwala, A/R
For Respondent: Shri Pankaj Kumar, CIT, D/R
Hearing: 21/11/2024Pronounced: 13/12/2024

PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order dated 09/07/2024 framed u/s 143(3) r.w.s. 144C(13) of the Act, pertaining to AY 2020-21. 2. The grievance of the assessee reads as under:- “1. Both lower authorities erred in making a Transfer Pricing adjustment amounting to Rs.5,66,00,731/-.

2.

Both lower authorities erred in rejecting the Transfer Pricing study carried out by the Applicant Company for determining the arm's length price of the transaction.

3.

Both lower authorities erred in holding that Tata Chemicals International Pte

The order continues below.

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