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2015 (11) TMI 1796 - HC - Income TaxAddition of prior period expenses provisions for warranty expenses and non deduction of TDS under Section 40(a)(ia) - HELD THAT - Commissioner of Income Tax (Appeals) decided the said three issues in favour of the Assessee and that order has been upheld by the ITAT by the impugned order - HAs regards the above three issues the Court is satisfied that no substantial question of law arises. TP Adjustment - Transactional Net Margin Method (TNMM) to the resale price method (RPM) as the most appropriate method (MAM) for the purposes of determination of the arms length price (ALP) - HELD THAT - The Court sees no reason to interfere since the adoption of the RPM by the Assessee was indeed found to be the MAM by the Dispute Resolution Panel (DRP) itself. AMP expenses - in view of the judgement of this Court in Sony Ericsson Mobile Communications India Pvt. Ltd. vs. Commissioner of Income Tax-III 2015 (3) TMI 580 - DELHI HIGH COURT issue already stands remanded to the ITAT.
Issues Involved:
1. Deletion of additions made by the Assessing Officer on prior period expenses, provisions for warranty expenses, and non-deduction of TDS under Section 40(a)(ia) of the Income Tax Act, 1961. 2. Shifting from Transactional Net Margin Method (TNMM) to resale price method (RPM) for determination of arms length price (ALP). 3. AMP expenses issue in light of the judgment in Sony Ericsson Mobile Communications India Pvt. Ltd. vs. Commissioner of Income Tax-III. Analysis: Issue 1: Deletion of Additions by the Assessing Officer The appeal by the Revenue challenged the order of the Income Tax Appellate Tribunal (ITAT) concerning the deletion of additions made by the Assessing Officer on prior period expenses, provisions for warranty expenses, and non-deduction of TDS under Section 40(a)(ia) of the Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) decided in favor of the Assessee, a decision upheld by the ITAT. The Court found no substantial question of law arising on these issues, thus upholding the ITAT's order. Issue 2: Shifting of Method for Determination of ALP The Assessee shifted from the Transactional Net Margin Method (TNMM) to the resale price method (RPM) for determining the arms length price (ALP). The Dispute Resolution Panel (DRP) identified the RPM as the most appropriate method (MAM). The Court declined to interfere with this decision, as the adoption of RPM by the Assessee was confirmed by the DRP, indicating no reason for intervention. Issue 3: AMP Expenses in Light of Sony Ericsson Mobile Communications India Pvt. Ltd. Case Regarding the AMP expenses issue, the Court referred to the judgment in Sony Ericsson Mobile Communications India Pvt. Ltd. vs. Commissioner of Income Tax-III. The Court had remanded this issue to the ITAT in a previous order. The present appeal was disposed of by upholding the ITAT's decision on all issues except the transfer pricing adjustment related to AMP expenses. This specific issue was remanded to the ITAT for a fresh decision in consideration of the Sony Ericsson case. In conclusion, the High Court upheld the ITAT's decision on various issues raised by the Revenue, except for the matter concerning AMP expenses, which was remanded for further consideration. The Court's analysis focused on the specific legal and factual aspects of each issue, ensuring a comprehensive review of the tax implications and judicial precedents involved in the case.
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