2016 (7) TMI 1251 - HC - Income Tax

TPA - comparability - Whether the Tribunal was correct in law in agreeing with Commissioner of Income Tax (Appeals) without examining all the relevant comparables considered by the Transfer Pricing Officer / Assessing Officer in their orders and thereby misdirected themselves in law by relying on partly irrelevant material in drawing their conclusion? - Held that - Revenue fairly states that the impugned order of the Tribunal has followed its own order in Respondent-Assessee s own case for the Assessment Year 2005-06. Being aggrieved by the impugned order of the Tribunal for the Assessment Year 200506 in respect of the same Respondent-Assessee, the Appellant-Revenue had preferred an appeal and this Court dismissed the Revenue s appeal on the ground that it does not give rise to any substantial question of law.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal for Assessment Year 2007-08 based on Transfer Pricing Officer's comparables analysis.

Analysis:
The High Court of Bombay heard an appeal challenging the order of the Income Tax Appellate Tribunal for the Assessment Year 2007-08 under Section 260A of the Income Tax Act, 1961. The main issue raised by the Revenue was whether the Tribunal erred in law by agreeing with the Commissioner of Income Tax (Appeals) without fully examining all the relevant comparables considered by the Transfer Pricing Officer and Assessing Officer. The Revenue argued that the Tribunal misdirected itself by relying on partly irrelevant material in reaching its conclusion.

During the proceedings, Mr. Bajpayee, representing the Revenue, acknowledged that the impugned order of the Tribunal was consistent with its decision in the Respondent-Assessee's case for the Assessment Year 2005-06. The High Court noted that the Revenue had previously appealed the Tribunal's decision for the Assessment Year 2005-06 but the appeal was dismissed by the Court on the grounds of not raising any substantial question of law. As a result, the High Court concluded that since the issue was already decided by the Court in a previous case, no substantial question of law arose in the present appeal for the Assessment Year 2007-08.

Therefore, the High Court dismissed the appeal, stating that no order as to costs was necessary. The judgment highlights the importance of thoroughly examining all relevant comparables in transfer pricing cases and the significance of raising substantial questions of law to challenge tribunal decisions effectively.