2018 (7) TMI 2324

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..../2012 dated 30.08.2013, relating to the Assessment Year 2004-05. 2. The appeal has been admitted on 24.02.2015 to consider the following substantial question of law: "Whether on the facts and in the circumstances of the case the Tribunal is right in law in holding that in mirror transactions ALP adjustments cannot be done, i.e., if one transaction is treated as at Arm's Length, no adjustment can be made on the other related corresponding transaction of the AE without appreciating that this stand is against the provisions of Section 92(3) of the Act?" 3. Now, Learned Counsel for the Revenue has suggested the additional substantial question of law, which reads as under: "Whether on the facts and in the circumstances of....

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....at arm's length in the hands of the assessee also. In view of the same, we are of the opinion that the DRP was right in holding that what is true of one end is true of the other end of the transaction but it erred in holding that the remedy is to suitably substitute the ALP determined in the hands of assessee also in the hands of the AE. As rightly pointed out by the learned counsel for the assessee, the DRP can only give directions as regards the determination of ALP in the hands of the assessee before it. It cannot give directions to consider the issue in the hands of an assessee whose case is not before it. It is for the relevant TPO/AO to take action in accordance with law in the light of facts and circumstances of the case before them ....

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....ssee that the extraordinary cost that the assessee had incurred due to various circumstances enumerated above, have not been considered by the TPO or the AO. According to the learned counsel for the assessee, this expenditure has to be taken into account while arriving at the profit margin of the assessee and also the average margins of the comparable companies or in the alternative, award of the Arbitral Tribunal should also be taken into consideration as the income of the assessee for determination of the ALP adjustment. As neither the AO/TPO nor the first appellate authority have considered these circumstances of the assessee for the loss and also in view of the evidence filed before us such as letter of NHAI stating that the estimated c....

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....rovisions of the Income Tax Act or Overriding Effect of the Treaties over the Domestic Legislations or the questions like Treaty Shopping, Base Erosion and Profit Shifting (BEPS), Transfer of Shares in Tax Havens (like in the case of Vodafone etc.), if based on relevant facts, such substantial questions of law could be raised before the High Court under Section 260-A of the Act, the Courts could have embarked upon such exercise of framing and answering such substantial question of law. On the other hand, the appeals of the present tenor as to whether the comparables have been rightly picked up or not, Filters for arriving at the correct list of comparables have been rightly applied or not, do not in our considered opinion, give rise to any ....