2019 (3) TMI 1615 - HC - Income Tax

TP Adjustment - remitting the matter for reconsideration and verifying the evidence pertaining to intra-group services for the purpose of ALP determination certain adverse observations with respect to the quality of evidence were made for AY 2012-13 which have been followed for the current year (Assessment Year 2013-14) - HELD THAT - This court has considered the submissions of the parties. It goes without saying that the observations of the tribunal for the previous years can be at best a guide. Nevertheless in order to allay any apprehensions the TPO is directed to carry out the task uninfluenced by any adverse observations contained in the order of the tribunal impugned in the present case 2018 (6) TMI 1501 - ITAT DELHI

Summary

Issues involved:
Challenge to adverse observations in ALP determination for Assessment Year 2013-14 based on previous year's observations.

Analysis:
The judgment pertains to an appeal under Section 260A of the Income Tax Act where the appellant contested adverse observations made in the ALP determination for the current year, referencing similar observations from the previous year. The court acknowledged the concerns raised by the appellant regarding the influence of past observations on the current assessment. It emphasized that while previous tribunal observations can serve as a guide, the Taxation Officer (TPO) must conduct the current assessment without being swayed by any adverse remarks from the past. The court directed the TPO to reevaluate the evidence regarding intra-group services for ALP determination without being influenced by the earlier adverse observations, specifically highlighted in the tribunal's order dated 27.06.2018. The judgment concluded by disposing of the appeal in favor of the appellant with the mentioned directions for the TPO to ensure an unbiased reassessment.