Transfer pricing remand principles: Tribunal may decide AMP international transaction issue in second round, but cannot reopen concluded first-round issues.

In a transfer pricing dispute under section 260A of the Income-tax Act, 1961, the Bombay HC clarified that where the issue whether AMP expenditure constitutes an international transaction was not decided in the impugned Tribunal order, but the Assessing Officer addressed it on remand and the second round was pending, the Tribunal was the proper forum to determine that question. It further stated that issues concluded in the first round, other than those expressly remanded, could not be reopened. The matter was therefore sent back to the Tribunal for decision on the international transaction issue in the second round, without re-adjudicating other concluded issues.

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Issues: Whether the Tribunal should decide in the second round whether the AMP expenditure constituted an international transaction, and whether issues already concluded in the first round other than those remanded could be re-adjudicated.

Analysis: The appeal arose from a transfer pricing dispute under Section 260A of the Income-tax Act, 1961 concerning assessment year 2009-10. The question whether the AMP expenditure was an international transaction had not been decided in the impugned Tribunal order, though the matter had been remanded for determination of arm's length price. Since the Assessing Officer, on remand, had examined the international transaction issue and the second round was already pending before the Tribunal, the Tribunal was the proper forum to decide that question. The Court also clarified that issues from the first round which were not remanded should not be reopened.

Conclusion: The matter was sent back to the Tribunal to decide the international transaction issue in the second round, without being bound by the impugned order, and without re-adjudicating other first-round issues except those remanded.

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