TaxTMI 
TaxTMI 
2023 (8) TMI 1665
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....ent year 2013-14), whereby, the earlier order dated 07/01/2020, passed under section 254(1) of the Act was recalled and the appeal was directed to be re-fixed for hearing. 3. In this appeal, the assessee has raised the following grounds:- "1.0) Jurisdiction exercised by the learned Transfer Pricing Officer is bad in law On the facts and circumstances of the case and in law the Hon'ble DRP-1, Mumbai (DRP') erred in confirming the determination of the Arm's Length Price ('ALP') at NIL by the learned Transfer Pricing Officer ('TPO') in his order under section 92CA by treating the specified domestic transactions ('SDT') as bogus and sham transactions. The reference made to the learned TPO by the learned Assessing Officer under section 92CA is merely for the purpose of verification and determination of the ALP of the SDT and therefore, the learned TPO exceeded his jurisdiction by characterizing the SDT as bogus transactions without undertaking any benchmarking / functional analysis of the same. Therefore, the transfer pricing adjustments aggregating to Rs. 245,45,18,050, confirmed by Hon'ble DRP is bad in law and....
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....) Copies of tax invoices of buyer (appellant) as well as the seller i.e. Stride Multitrade Pvt. Ltd. b) Copy of acknowledged intimations to the Godown in relation to transfer of goods by the buyer (Appellant) as well as the seller (Stride Multitrade Pvt Ltd) c) Quantitative analysis and reconciliation of purchase and sales. Therefore, the transfer pricing adjustment on purchase of guar split (gum) amounting to Rs. 1,00,82,50,230 confirmed by Hon'ble DRP is bad in law and needs to be deleted. 4.0) Disallowance/transfer pricing adjustment of sales return of guar seeds amounting to Rs. 21,91,99,540 On the facts and circumstances of the case and in law, the learned Assessing Officer erred in making protective addition of the sales returns amounting to Rs. 21,91,99,540 by stating that the learned TPO has not verified the details of sales return upon reference made to him even after specific direction issued by the Hon'ble DRP. Accordingly, the transfer pricing adjustment of sales return of guar seeds amounting to 21,91,99,540 is bad in law and needs to be deleted. 5.0) Disallowance of loss on high sea sales of ....
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....me of the assessee by invoking the provisions of Chapter X of The Income Tax Act to the transactions covered by provisions of Section 92BA (1) for assessment year 2013-14 till it was omitted. This issue has been dealt with by the honourable Karnataka High Court in case of Texport overseas (supra) in favour of the assessee holding that as the provisions of Section 92BA (1) has been omitted from the Income Tax Act without any saving clause therefore the natural corollary would be that it did not exist at all in the statute book. Accordingly, we allow the additional ground of appeal and hold that the impugned transfer pricing adjustment of 2,196,447,328/- made by the learned assessing officer is not sustainable. 018. However we are also conscious that the provisions of Section 40A (2) of the act still exists in the statute book. The decision of the Texport overseas Ltd of the coordinate bench, which was partly challenged by the revenue before the honourable High Court, also held so. In that case, the coordinate bench held that the adjustment on account of examination of the arm's-length price of the specified domestic transactions is not valid because of deletion of the p....
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....ral corollary would be to examine the allowability of these expenses u/s 40A (2) of the act. 020. In view of this ground number 5 of the appeal of the assessee is partly allowed." 7. As a similar issue is arising in the present appeal, we see no reason to deviate from the view so taken by the Co-ordinate Bench of the Tribunal in the aforesaid decision. Accordingly, respectfully following the aforesaid decision the transfer pricing adjustment of Rs. 245,45,18,050, made by the AO/TPO in respect of specified domestic transactions is not sustainable. However, the AO is directed to examine the allowability of the expenditure in terms of provisions of section 40A(2) of the Act. As a result, grounds No. 2-4, raised by the assessee in the present appeal are allowed in the terms indicated above. 8. The issue arising in ground no. 5, raised in assessee's appeal, is pertaining to the disallowance of loss on high seas sales of crude palm oil. 9. The brief facts of the case pertaining to this issue are: The assessee is engaged in the business of trading of commodities both physical and futures. For the year under consideration, the assessee filed its return of income on 3....