TaxTMI 
TaxTMI 
2018 (9) TMI 1977
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....A (i) of the IT Act, being omitted, no adjustment can be directed under said section: 4.1.1. The Learned Assessing Officer and the Learned DRP have failed to appreciate that section 92BA (i) of the IT Act has been omitted by Finance Act 2017, w.e.f 01.04.2017 without a saving clause, thereby implying that such law never existed in the statute book. Hence, the transaction of remuneration paid by the Appellant Company to its personnel referred to in section 40A (2) (b) is not a specified domestic transaction under section 92BA of the IT Act. 4.1.2. The Hon'ble DRP has erred in failing to follow the binding order of the Hon'ble ITAT passed ' the Appellant's own case in IT(TP) A No. 1722/Bang/2017 dated 22.12.2017 for earlier assessment year 201314, wherein it was held that as section 92BA(i) being omitted by Finance Act 2017, the same has to be understood that it had never existed in the statute book. 4.2. As regards reference made under section 92CA (1): 4.2.1. Without prejudice to the above, the reference to the TPO under section 92CA (1) by the Learned Assessing Officer is in defiance to Instruction Nos. 15 of 2015 86 3 of 2016 an....
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.... TNMM in respect of all other specified domestic transactions where the operating cost included directors' remuneration, the Learned TPO ought not to have made any adjustment in respect _of directors' remuneration separately. 4.4.6. The Learned TPO and the Hon'ble DRP have failed to appreciate that the Appellant's operating profit /operating revenue (OP/OR) being 10.08% and average margin of 12 companies being 11.86%, the net margin of the Appellant is within the permissible bandwidth under second proviso to section 92C (2) and hence, the specified domestic transaction entered into by the Appellant is at arm's length price. 4.4.7. Without prejudice to the above, the Learned DRP is not justified in upholding the action of the Learned TPO in selecting Biba Apparels Pvt Limited, as comparable company, since the financial statements of the said companies are not available in public domain. 4.4.8. Without prejudice to the above, the Learned DRP is not justified in upholding the action of TPO in selecting companies namely; Monarch Apparels Ltd., Page Industries Limited, SVG Fashions Ltd, and Jagannath Textiles Co. Ltd without carrying any FA....
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....06/- under section 234B of the IT Act when the conditions for levying such interest did not exist in the present case. For the above grounds and for such other grounds which may be allowed by the Honourable Members to be urged at the time of hearing, it is prayed that the aforesaid appeal be allowed. 2. With regard to Transfer Pricing adjustment issue, the learned counsel for the assessee has invited our attention that this issue is squarely covered by the order of the Tribunal in the assessee's own case for the assessment year 201314 in which the matter was restored to the AO with a direction to the AO to adjudicate the issue of claim of expenditure in accordance with law after affording opportunity of being heard to the assessee. 3. The learned counsel for the assessee further filed a copy of the order of the Tribunal with a request that following the order of the Tribunal for earlier years, the matter may be restored back to the AO for readjudication of the issue. The learned DR did not dispute these facts. He, however, placed reliance upon the order of the CIT(A). 4. Having carefully examined the orders of lower authorities, we find that impugned issue is squarely c....
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....der which the rule has been framed in that case also the pending proceeding will not be affected by omission of the rule. In the absence of any such provisions in the statute or in the rule, the pending proceeding will lapse under rule under which the notice was issued or proceeding being omitted or deleted". 8. In the case of General Finance Co., Vs. ACIT, their Lordship of the Apex Court has again examined the issue and held that the principle underlying section 6 as saving the right to initiate proceedings for liabilities incurred during the currency of the Act will not apply to omission of a provision in an Act but only to repeal, omission being different from repeal as held in different cases. Following the aforesaid judgments, the jurisdictional High Court has also expressed the same view in the case of CIT Vs. GE Thermometrics India Pvt. Ltd. The relevant observation of the jurisdictional High Court is extracted hereunder: "8. Admittedly, in the instant case, there is no saving clause or provision introduced by way of an amendment while omitting sub-section (9) of Section 10B. Therefore, once the aforesaid section is omitted from the statute book, the....
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.... the aforesaid amendments, the AO is required to adjudicate the issue of claim of expenditures in accordance with law after affording opportunity of being heard to the assessee. We therefore set aside the orders of the AO and the DRP and restore the matter to the AO with the direction to readjudicate the issue of claim of expenditure incurred in respect of which payment has been made or is to be made to person referred to in clause (b) of sub section 2 of section 40A of the Act. Accordingly, since we have restored the matter to the AO, we find no justification to deal with the other issues on merit. Accordingly, appeal of the assessee stand allowed for statistical purposes." 5. Since the impugned issue is squarely covered by the aforesaid order of the Tribunal, we set aside the order of the CIT(A) and restore the matter to the AO, following earlier order of the Tribunal. 6. The other ground relates to the disallowance made under section 14A of the Act. In this regard, our attention was invited to the fact that in the assessment order, AO has noted that assessee did not earn any exempted income and the said fact was again taken cognizance by the CIT(A). Despite having noted th....