2019 (7) TMI 1326 - HC - Income Tax

High Court allows appeal, Revenue challenges Assessing Officer's deletion, ITAT's decision upheld

Pr. Commissioner of Income Tax – 1 Versus M/s. Avery Dennison India Pvt. Ltd.

The High Court condoned the delay in filing the appeal, allowing it to proceed. The Revenue challenged the deletion of additions made by the Assessing ... TP adjustment - determining the Arm’s Length Price - department requested to remand before TPO as per earlier year - HELD THAT:- The Court finds that in the impugned order, the ITAT has given detailed reasons for not remanding the issue to the TPO. In particular, the ITAT noted that in AYs 2010-11 to 2012-13 the Dispute Resolution Panel (‘DRP’) accepted the Assessee’s determination of the ALP with regard to two intra group services received by the Assessee viz., Ticketing HUB and VIPFS. As regards the other intra group services, the ALP was ascertained to be NIL by application of the CUP. Court finds that the ITAT has given detailed reasons for accepting the case put forward by the Assessee. The view taken is a plausible one and does not give rise to any substantial question of law. Other submission made is that the ITAT in fact did not consider the materials placed before the TPO and the decision taken thereon by the TPO in relation to each of the intra group services received by the Assessee from its AEs. The Court finds that the ITAT has in fact applied its mind to the evidence on record and given factual findings which this Court does not find to be perverse. No substantial question of law arises Issues:1. Delay in filing the appeal condonation.2. Deletion of addition made by the Assessing Officer without considering Transfer Pricing Officer's findings.3. Previous judgments concerning the same Assessee.4. Remand of the matter to Transfer Pricing Officer.5. Detailed reasons for not remanding the issue to the TPO.6. Consideration of materials placed before the TPO by the ITAT.7. Determination of Arm's Length Price of international transactions.Delay Condonation:The delay in filing the appeal was condoned by the High Court based on the reasons explained in the application, allowing the appeal to proceed.Deletion of Addition:The Revenue appealed against the ITAT's order deleting the addition made by the AO without considering the TPO's findings on determining the Arm's Length Price of international transactions involving the Assessee and its Associated Enterprises.Previous Judgments:Past judgments involving the same Assessee for earlier Assessment Years were discussed, highlighting decisions favoring the Assessee in previous years and pending Special Leave Petitions in the Supreme Court.Remand to TPO:The ITAT's decision not to remand the matter to the TPO for fresh determination was based on detailed reasons provided in the impugned order, citing previous acceptance of Assessee's determination of ALP by the DRP for certain services.Detailed Reasons for Non-Remand:The ITAT extensively discussed the Assessee's case, providing detailed reasons for accepting the Assessee's position, which the High Court found plausible and not giving rise to any substantial question of law.Consideration of Materials:The High Court found that the ITAT did consider the materials placed before the TPO and made factual findings that were not deemed perverse, indicating a thorough review of the evidence on record.Arm's Length Price Determination:The issue of determining the Arm's Length Price of international transactions was a central point of contention, with the ITAT's decision ultimately upheld by the High Court, leading to the dismissal of the appeal as no substantial question of law arose.