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2018 (7) TMI 485 - HC - Income TaxTPA - comparable selection - ALP - substantial question of law or fact - Held that - The controversy involved herein is no more res integra in view of the decision of this Court in M/S. SOFTBRANDS INDIA P. LTD. 2018 (6) TMI 1327 - KARNATAKA HIGH COURT , wherein it has been observed that unless the finding of the Tribunal is found ex facie perverse, the Appeal u/s. 260-A of the Act, is not maintainable
Issues:
Appeal challenging Tribunal order on application of proviso to Section 92C of the Act regarding Arms' Length Price determination based on RBI rates for foreign exchange trading. Analysis: The appeal before the High Court pertains to the application of the proviso to Section 92C of the Income Tax Act in the context of determining the Arms' Length Price (ALP) based on RBI rates for trading in foreign exchange. The Revenue raised a substantial question of law regarding the Tribunal's decision to allow a +/- 5% range in cases where only one reference rate of RBI is used as a benchmark for ALP. The Tribunal's finding emphasized the relevance of the RBI rates being based on averaging, similar to the approach taken with LIBOR rates in a previous case. The Tribunal concluded that the Assessee was justified in claiming the benefit under the proviso to Section 92C(3) as their prices were within the acceptable range of the RBI rates, hence no transfer pricing adjustment was necessary. The High Court referred to a previous decision where it was observed that unless the Tribunal's finding is ex facie perverse, an appeal under Section 260-A of the Act is not maintainable. The Court highlighted that substantial questions of law related to interpretation of DTAA provisions, Income Tax Act, or BEPS could be raised, but issues related to comparables selection or application of filters for comparables do not constitute substantial questions of law. The Court emphasized that dissatisfaction with Tribunal's factual findings is not sufficient to invoke Section 260-A. Therefore, the Court dismissed the Revenue's appeal as it did not raise any substantial question of law. In conclusion, after hearing arguments from both sides, the High Court found no substantial question of law in the present case. Consequently, the Appeal filed by the Revenue was dismissed, with no order as to costs.
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