Omitted transfer pricing provision cannot sustain an addition based solely on section 92BA(i), Tribunal confirms.

A transfer pricing adjustment made for specified domestic transactions under section 92BA(i) could not survive after the omission of that clause by the Finance Act, 2017. Applying the binding view that an omitted provision without a saving clause is treated as never having existed, the Tribunal held that the reference to the Transfer Pricing Officer and the consequent addition based solely on section 92BA(i) were unsustainable. In the absence of any contrary jurisdictional High Court ruling, the Revenue's challenge failed and the deletion of the addition was upheld.

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Issues: Whether the transfer pricing adjustment relating to specified domestic transactions was valid after omission of clause (i) of section 92BA of the Income-tax Act, 1961, and whether the addition sustained by the Assessing Officer was liable to be deleted.

Analysis: The reference to the Transfer Pricing Officer had been made in the context of specified domestic transactions under section 92BA(i), and the adjustment was made under section 92CA(3). The Tribunal followed the binding view that, once clause (i) of section 92BA was omitted by the Finance Act, 2017, the omission operated so that the provision was treated as never having existed. In the absence of any contrary jurisdictional High Court ruling, the Tribunal applied the rule of precedent and accepted the view that the transfer pricing adjustment based on the omitted clause could not survive.

Conclusion: The deletion of the transfer pricing addition was upheld and the Revenue's challenge failed.

Final Conclusion: The assessment adjustment based on section 92BA(i) did not survive, and the Revenue's appeal was dismissed.

Ratio Decidendi: Omission of a charging or enabling provision without a saving clause renders the omitted provision inoperative as if it had not existed, and a transfer pricing adjustment founded solely on such omitted provision cannot be sustained.

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