TaxTMI 
TaxTMI 
2026 (7) TMI 738
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.... the circumstances of the case, the CIT(A) was justified in deleting the adjustment by relying on the order of Hon'ble Supreme Court in the case of Glaxo Smith Kline Asia Pvt. Ltd, in SLP Civil No. 18121/2007 without appreciating the fact that the no deduction u/s. 80IA will be allowed to the A.E. of the assessee on the enhanced income due to TP adjustment as per proviso to section 92C(4), hence, the transaction is not revenue neutral and therefore, the decision of Hon'ble Supreme Court is not applicable to the facts of the assessee? 3. Whether on the facts and in the circumstances of the case, the CIT(A) was justified in deleting the adjustment by relying on the order of Hon'ble Supreme Court in the case of Glaxo Smith Kline Asia Pvt. Ltd, in SLP Civil No. 18121/2007 without appreciating the fact that the TPO is by law mandated to compute the arm's length price of the specified domestic transaction as per section 92(2A)? 4. Whether on the facts and in the circumstances of the case, the CIT(A) was justified in deleting the adjustment made by the transfer pricing officer to the tune of Rs. 4,53,57,220/- on account of sale of port services without ap....
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....rding the possibility of raising an additional ground of appeal concerning the issue of limitation. Based on the legal advice received, it was recommended that, in light of the matter being pending before the Hon'ble Supreme Court, the additional ground of appeal should be appropriately raised. However, this process took time and there is a delay in filing cross objection before Your Honour." 4.1 Having considered the explanation furnished, we are satisfied that the delay was neither deliberate nor attributable to any lack of bona fides. The assessee has shown sufficient cause within the meaning of law. Accordingly, the said explanation of the assessee is accepted and the delay in filing the Cross-Objection is condoned and the Cross-Objection is admitted for adjudication 5. Briefly stated facts of the case are that assessee filed return of income declaring total at Rs. 12,24,64,490/- on 30.11.2016 after claiming deduction under chapter VIA of Rs. 44,19,40,377/-. The return was further revised on 29.11.2017 at total income of Rs. 27,24,64,490/-. The return of income was selected for scrutiny and statutory notices under the Income-tax Act, 1961 (in short the Act) were issue....
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....eived O&M Services only from JSWIL and no other party. Further, even the entity JSWIL itself is claiming deduction u/s. 80IA and it is crediting only Rs. 80 per unit to its profit & loss account. Even had JSWIL paid a higher amount, it would have been exempted under section 80IA. Thus, keeping in view the ruling of the Hon'ble Supreme Court in the case of Glaxo Smith Kline Asia Pvt. Ltd. (SLP Civil No. 18121/2007), since, the transaction is revenue neutral and there is no loss of revenue to the Government of India, the transactions can be considered to be at arm's length from the Indian TP prospective. The addition of Rs. 18,40,00,000/- is deleted. In the result, these grounds of appeal are allowed." 7.1 We have carefully considered the rival submissions. The Revenue has not disputed the factual findings recorded by the learned CIT(A) that both entities were taxable in India and were entitled to deduction under section 80-IA. Nor has it been demonstrated that the impugned arrangement resulted in any erosion of the tax base or diversion of profits outside the tax net. The fundamental object of transfer pricing provisions is to prevent tax avoidance through manipulation of....
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.... Pr. CIT v. UE Development India (P.) Ltd. considered to all question of law as under: "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. The Hon'ble High Court noted as under: - "3.4.1 We have heard the rival contentions and perused and carefully considered the material on record, including the judicial pronounce cited. On an appreciation of the facts on record it is seen that the assessee is a subsidiary of United Engineers Mauritius Co. Ltd., which in turn is a subsidiary of United Engineers Malaysia, Berhad. In order to participate in the inter-rational bidding for the development, maintenance and management of National Highway under the NHAI, United Engineers Malaysia formed a joint venture (JV) with SR Projects Ltd., and along with its JV partner has secured three highway projects in India for the purpose....
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....." 8.1 As far as Ground No. 2 of the appeal is concerned the assessee also relied on decision of the Co-ordinate Bench of Tribunal in the case of Tecnimont SPA India v. Additional Director of Income-tax (IT) reported in 2022(145) taxmann.com 477 (Mumbai - Trib.). The relevant finding of the Tribunal is reproduced as under: "Having heard both the parties and after perusal of the records, we note that the payments made by the assessee PE to its AE's i.e. assessee with TICB and EDTICB were held to be at Arm's Length by this Tribunal (supra); and since the same international transaction of the instant assessee's procurement cost (being sub-contracting income for the AE's i.e. of assessee viz TICB and EDTICB) has been accepted as Arm's Length for the AE's and the same being mirror transaction cannot be considered excessive in the hands of the assessee/appellant. Therefore, on the same reasoning/ratio of the decision of the Tribunal (Banglore) in UE Development India (P.) Ltd. (supra) which has been upheld by Hon'ble High Court (supra), we hold that where the Tribunal has accepted the international transaction to be at Arm's Length Price in the....