DEPUTY COMMISSIONER OF INCOME-TAX vs. ABICOR BINZEL PRODUCTION (INDIA) PVT. LTD.,, PUNE

Shri Darpan Kirpalani appearing on behalf of the assessee submitted at the outset that the assessee has entered into Advance Pricing Agreement (APA) with Central Board of Direct Taxes (CBDT) on 22nd January, 2016 in

Dr. Vivek Aggarwal representing the Department fairly admitted that the assessee has entered into an APA and the Tribunal in the earlier assessment years and in the subsequent assessment year has directed to apply APA, provided the international transactions carried out by the assessee are of similar nature.

Both sides heard. In the assessment years under appeal the assessee had entered into following international transactions with the AE: Nature of transactions Amount (Rs.) Purchase of raw material and components 8,55,81,127 Sale of finished goods received 12,24,17,172 Sale of finished goods receivable 7,29,13,588 Purchase of tools, label printing software, rent for video 6,08,673 conferencing system and calendars Total 28,15,20,560

The Tribunal remitted the issue back to TPO/AO with the following observations : “5. In the light of fact that assessee has entered into APA, the Co-ordinate Bench of the Tribunal in the assessment year 2009-10 has directed Assessing Officer to decide the issue in accordance with the terms and conditions of APA as nature of transactions are similar. The relevant extract of findings of the Tribunal on this issue are as under: “8. The perusal of grounds of appeal reflects that the assessee is in appeal on account of transfer pricing adjustment made in the hands of assessee. No other grounds of appeal have been raised by the assessee other than transfer pricing adjustment. The assessee has made a request since it had entered into Advance Pricing Agreement (APA) with CBDT covering nine years from assessment years 2010-11 to 2013-14 under roll back provisions and from assessment years 2014-15 to 2018-19 being the balance APA period, similar proposition should be applied to the year under consideration also as the international transactions entered into by the assessee with its associate enterprises in the instant assessment year are identical to the international transactions which were part of APA proceedings. The DCIT(TP) 1(1), Pune has submitted a report dated 13.07.2016, in which it has been stated that the international transactions during the assessment year 2009-10 were similar to the international transactions entered during assessment years 2010-11 to 2015-16. In view thereof, where the international transactions entered into by the assessee with its associate enterprises are similar to the international transactions in the succeeding years, then where the APA proceedings have been carried out in the case of assessee and the Board and the assessee have come to a settlement vis-à-vis the manner of computation of arm's length price in the case of assessee in relation to the international transactions with its associate enterprises, we deem it fit to restore this issue also back to the file of Assessing Officer, who shall consider the plea of assessee and shall after obtaining report from the TPO in this regard, decide the issue in accordance with law. Reasonable opportunity of being heard shall be afforded to the assessee while deciding the issue. The grounds of appeal raised by the assessee are thus, allowed. In respect of the balance additions, no specific ground of appeal has been raised nor any arguments have been made by the learned Authorized Representative for the assessee, hence the same are not disturbed.” In view of the facts discussed above, we are of considered opinion that it would be just and proper to restore these issues to the file of Assessing Officer with similar directions as above by the Tribunal in asssessee’s appeal for assessment year 2009-10. We further find forces in the submission of ld. DR that before deciding the issues raised in appeals under consideration, it would be relevant to ascertain the nature of international transactions that have been carried out during assessment years 2005-06 to 2007-08. If they are of similar nature, the same can be decided afresh in line with the terms and conditions of APA. The appeals of the assessee are thus, allowed for statistical purpose with aforesaid directions.”

The assessment year under appeal is intervening the two assessment years where the Tribunal has directed to follow the terms and conditions of APA for making transfer pricing adjustment, if any. Since, both the sides are unanimous in admitting that the issue in the present appeal is similar to assessment years 2005-06 to 2007-08, we deem it appropriate to dispose of this appeal with similar directions. Thus, the appeal of Department is allowed for statistical purpose with the directions as stated in the order of Tribunal for assessment years 2005-06 to 2007-08 in the appeals by assessee.

In the result, the appeal of Revenue is allowed for statistical purpose.