TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 179
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.... the Act was issued on 02.09.2014. The case was referred to the Transfer Pricing Office (TPO) vide letter dated 16.02.2016. The TPO vide letter dated 23.03.2016 called upon the assessee to submit documents maintained under the provisions of section 92D of the Act and the assessee submitted the same on 20.07.2016. The learned TPO issued notice dated 20.09.20 16 upon the assessee to show cause why the TP Documentation should not be rejected, adopting the comparables selected by the TPO and calling for objections. The assessee vide letter dated 03.10.2016 submitted a detailed reply demonstrating why the learned TPO should not proceed with the proposed comparables. The TPO however without appreciating the submissions of the appellant proceeded to pass the order under section 92CA of the Act proposing an adjustment of Rs.59,34,03,425/-, and the details are provided below: Particulars As disclosed by appellant As per TPO Order Addition proposed Returned Income 3236120 241671830 238435710 ALP adjustments transfer pricing - 353400504 353400504 Additions with regards to PF & ESI - 1567211 1567211 Total 3236120 593403425 593403425 3. The AO passed the draft assessment....
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..... v. CIT (1998) 229 ITR 383 (SC), we admit the additional grounds. 9. The learned AR also submitted that the similar issue was considered by the coordinate bench of the Tribunal in the case of Texport Overseas Pvt. Ltd., in IT(TP)A No.1722/Bang/2017 and that the said order of the Tribunal is confirmed by the High Court of Karnataka vide ITA No.392/2018 order dated 12/12/2019. The learned AR therefore submitted that decision of jurisdictional High Court is applicable directly to the assessee's case and prayed for the deletion of the TP adjustments made. 10. The Ld DR supported the decisions of the lower authorities. 11. We heard the rival submissions and perused the material on record. We notice that co-ordinate bench of the Tribunal in the case of Texport Overseas Pvt. Ltd. (supra has considered the similar issue, wherein it is held that - 4. The learned AR invited our attention that provision of section 92BA was brought on statute by the Finance Act, 2012 w.e.f. 01.04.2013 relevant to assessment year 2013-14. Therefore, it is the first year when the transactions are to be examined in the light of provision of section 92BA of the Act. The AO having observed that the assessee h....
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....e of CT Vs. GE Thermometrics India Pvt. Ltd. in ITA No. 876/2008 in which while dealing the omission sub-section (9) of Section 10B the Hon'ble High Court has held that once the section is omitted from the statute book, the result is it had never been passed and be considered as a law that never exists and therefore, when the assessment orders were passed, the AO was not justified in taking note of a provision which was not in the statute book and denying benefit to the , Therefore, in the light of these judicial pronouncements, sub-section (i) of section 92BA shall be deemed to be not on the statute since beginning. 6. The learned DR on the other hand has contended that even if it is held that the clause (i) of section 92BA relating to expenditures 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 is not on the statute since beginning in view of the amendment and in the light of various judicial pronouncements the reference made by AO to TPO is bad in law, the AO is required to examine the claim of the in the light of other provisions of the Act. "7. Having carefully examined the orde....
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....h 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 result is it had never been passed and be considered as a law that never exists and therefore, when the assessment orders were passed in 2006, the AO was not justified in taking note of a provision which was not in the statute book and denying benefit to the asse....
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....ion 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." 12. The Hon'ble Karnataka High Court upheld the above decision of the Tribunal with the following observations. 5. Having heard learned Advocates appearing for parties and on perusal of records in general and order passed by tribunal in particular it is clearly noticeable that Clause (i) of section 92BA of the Act came to be omitted w.e.f. 01.04.2019 by Finance Act, 2014. As to whether omission would save the acts is an issue which is no more res intigra in the light of authoritative pronouncement of Hon'ble Apex Court in the matter of Kolhapur Canesugar Works Ltd. v. Union of India AIR 2000 SC 811 whereunder Apex Court has examined the effect of repeal of a statute vis-a-vis deletion/addition of a provision in an enactment and its effect thereof. The import of section 6 of Gener....