Tribunal Upholds Deletion of Adjustments in Specified Domestic Transactions for AY 2015-16; Revenue's Appeal Dismissed.

The ITAT Nagpur dismissed the Revenue's appeal against the CIT (A)'s decision, which deleted adjustments made by the AO regarding specified domestic transactions for AY 2015-16. The Tribunal upheld the CIT (A)'s decision, relying on the Karnataka High Court's ruling that the omission of section 92BA(i) rendered the AO and TPO's actions invalid. The Tribunal found the Revenue's arguments unpersuasive, and Ground Number 2 was dismissed as general without additional grounds raised.

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The Appellate Tribunal ITAT NAGPUR, consisting of Shri S.S. Godara and Dr. Dipak P. Ripote, heard an appeal by the Dy. Commissioner of Income Tax Circle 4 Nagpur against an order from the Commissioner of Income Tax(Appeal)-1, Nagpur. The appeal was in relation to the Assessment Order under section 143(3) dated 31.12.2018 for AY 2015-16. The Departmental Representative for the Revenue argued that the subsequent amendment to the order u/s 92CA(3) was not retrospective and should not have been deleted by the CIT (A). The Authorized Representative argued that the CIT (A) rightfully deleted the adjustments made by the AO in reference to Specific Domestic transactions based on the decision of ITAT Bangalore. The Tribunal reviewed the records and found that the AO had made an adjustment to the value of specified domestic transactions following a recommendation from the Transfer Pricing officer. The CIT (A) deleted the addition, a decision upheld by the Karnataka High Court. The High Court held that the omission of section 92BA(i) by the Finance Act, 2017, rendered the decision of the AO and TPO invalid. The Tribunal upheld the CIT (A) decision based on the authoritative principles enunciated by the Hon'ble Supreme Court. Consequently, the Revenue's appeal was dismissed. Ground Number 2 was also dismissed as it was general in nature and no additional grounds were raised by the Revenue.

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