TaxTMI 
TaxTMI 
2023 (3) TMI 962
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....ons to the Transfer Pricing Officer (TPO), who proposed an adjustment of Rs.2,76,89,691/-. The Learned DRP also confirmed the same and hence, the Assessing Officer passed the assessment order making addition of the amount mentioned above. 4. The above said addition consisted of addition made in respect of the Specified domestic transaction and also in respect of international transaction. 5. The assessee has filed an additional ground before the Tribunal, wherein it is contended that the adjustment towards Specified domestic transactions should not have been made in view of the omission of Clause (i) in section 92BA of Act by the Finance Act 2017 w.e.f. 1.4.2017. The Learned AR first argued on the additional ground. He placed his reliance on the decision rendered by Hon'ble High Court of Karnataka in the case of PCIT Vs. Texport Overseas Pvt. Ltd. (2020) 271 Taxman 170 (Karnataka), wherein it was held that the omission of the provisions of section 92BA(i) from the Statute would mean that it had never been passed and to be considered as law never been existed . Accordingly he submitted that the Assessing Officer/TPO was not justified in making transfer pricing adjustment i....
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....se law:- (a) Neogenetics Foods P Ltd vs. DCIT (IT(TP)A No.361/Bang/2021 (b) PCIT vs. Texport Overseas P Ltd (2020)(313 CTR (Kar) 485) (c) Mahindra Two Wheelers Ltd vs. DCIT (ITA No.519/Mum/2018) 17. In the case of Neogenetics Foods (P) Ltd vs. CIT (supra), the Bangalore bench of ITAT has accepted the above said legal contentions following the decision rendered by Hon'ble Karnataka High Court in the case of PCIT vs. Texport Overseas (P) Ltd (2020)(313 CTR (Kar) 485). However, the Tribunal restored the issue to the file of the AO for examining the claim in terms of sec. 40A(2)(a) of the Act. For the sake of convenience, we extract below the decision rendered by the Bangalore bench of Tribunal in the above cited case:- 13. We have carefully considered the rival submissions. The Finance Act, 2012 extended its scope to cover certain domestic transactions with related parties within India, defined as 'Specified Domestic Transactions' (SDT) with effect from AY 2013-14. The Finance Act, 2012 introduced Section 92BA giving the meaning of SDT and it provided as follows: "SECTION 92BA: MEANING OF SPECIFIED DOMESTIC TRANSACTION. For....
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.... omission of clause (i) from the statute, the proceedings already initiated or action taken under clause (i) becomes redundant or otiose. In this regard, the Assessee placed reliance on decision of ITAT Bangalore Bench in the case of Textport Overseas Pvt.Ltd. Vs. DCIT IT(TP)A.No.1772/ Bang/2017 order dated 22.4.2021 wherein it was held that in the light of provisions of section 6 of the General Clauses Act, in such a case, the court is to look to the provisions in the rule which has been introduced after omission of the previous rule to determine whether a pending proceeding will continue or lapse. If there is a provision therein that pending proceedings shall continue and be disposed of under the old rule as if the rule has not been deleted or omitted then such a proceeding will continue. If the case is covered by Section 6 of the General Clauses Act or there is a pari-materia provision in the statute under 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 proceedi....
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....fect, it cannot be granted afterwards. Savings of the nature contained in Section 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceedings shall not continue but fresh proceedings for the same purpose may be initiated under the new provision." 6. In fact coordinate bench under similar circumstances had examined the effect of omission of sub-section (9) to Section 10B of the Act w.e.f. 01.04.2004 by Finance Act, 2003 and held that there was no saving clause or provision introduced by way of amendment IT(TP)A No.361/Bang/2021 by omitting sub-section (9) of Section 10B. In the matter of GENERAL FINANCE CO. vs. ACIT, which judgment has also been taken note of by the tribunal while repelling the contention raised by revenue with regard to retrospectivity of Section 92BA(i) o....
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....e addition relating to specified domestic transactions made u/s 92CA of the Act. However, as pointed out by Ld D.R, the co-ordinate bench, in the case of Texport overseas P Ltd, has restored the matter to the file of the A.O. with the direction to examine the claim of expenditure in accordance with the provisions of section 40A(2) of the Act. Following the same, we restore this issue to the file of the AO with the direction to examine the claim of expenditure mentioned above in terms of the provisions of section 40A(2) of the Act. In view of the above conclusion, we refrain from adjudicating other issues raised by the assessee in the grounds of appeal with regard to correctness of determination of ALP of the SDT." 18. We notice that the co-ordinate Mumbai bench has also taken an identical view in the case of Mahindra Two Wheelers Ltd (supra). Accordingly, following the above said decisions, we hold that the reference made to TPO under clause (i) of sec.92BA is not valid and consequently, the transfer pricing adjustment made in respect of Specified Domestic Transaction is liable to be deleted. Accordingly, we direct the AO to delete the transfer pricing adjustment. ....