Appeal allowed: conversion treated as manufacture, entitlement under Notification No.56/2002-CE and CENVAT credits reinstated, including returned and ...
The HC affirmed the ITAT's decision that the APA concluded with the revenue was germane to the assessment year, given no change in functions performed, assets employed or risks assumed between the years covered by the APA and the year under scrutiny. The HC held that the TPO/CIT(A) must give effect to the APA's terms - including the agreed arm's-length margin - and reassess transactions accordingly. The Court rejected Revenue's contention that an APA is confined to the specific years agreed and cannot inform statutory transfer-pricing determination where FARs are unchanged, directing the assessing authorities to apply the APA's consolidated margin (19.26%) and FAR analysis in the assessment.
The HC affirmed the ITAT's decision that the APA concluded with the revenue was germane to the assessment year, given no change in functions performed, assets employed or risks assumed between the years covered by the APA and the year under scrutiny. The HC held that the TPO/CIT(A) must give effect to the APA's terms - including the agreed arm's-length margin - and reassess transactions accordingly. The Court rejected Revenue's contention that an APA is confined to the specific years agreed and cannot inform statutory transfer-pricing determination where FARs are unchanged, directing the assessing authorities to apply the APA's consolidated margin (19.26%) and FAR analysis in the assessment.
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