2023 (11) TMI 1276 - AT - Income Tax

Adjustment u/s 92BA (i) as omitted by Finance Act 2017, w.e.f. 01.04.2017 - determination of the arm s length price of the Specified Domestic Transaction under clause (i) of section 92BA - meaning of the words repeal omission - HELD THAT - Hon ble Karnataka High Court in the case of Texport Overseas Pvt. Ltd. 2019 (12) TMI 1312 - KARNATAKA HIGH COURT categorically held that once the section 92BA(i) was omitted by Finance Act, 2017, the resultant effect is that it had never existed. The Ld.DR has not brought to our notice any contrary decision of the Hon ble Jurisdictional High Court. As per the Law of Precedence, we are duty bound to follow the decision of the Hon ble Karnataka High Court in the absence of any contrary decision of the Hon ble Jurisdictional High Court on the issue. Therefore, we uphold the decision of Ld.CIT(A). Decided against revenue.

Summary

The Appellate Tribunal ITAT NAGPUR, consisting of Shri S.S. Godara and Dr. Dipak P. Ripote, heard an appeal by the Dy. Commissioner of Income Tax Circle 4 Nagpur against an order from the Commissioner of Income Tax(Appeal)-1, Nagpur. The appeal was in relation to the Assessment Order under section 143(3) dated 31.12.2018 for AY 2015-16. The Departmental Representative for the Revenue argued that the subsequent amendment to the order u/s 92CA(3) was not retrospective and should not have been deleted by the CIT (A). The Authorized Representative argued that the CIT (A) rightfully deleted the adjustments made by the AO in reference to Specific Domestic transactions based on the decision of ITAT Bangalore. The Tribunal reviewed the records and found that the AO had made an adjustment to the value of specified domestic transactions following a recommendation from the Transfer Pricing officer. The CIT (A) deleted the addition, a decision upheld by the Karnataka High Court. The High Court held that the omission of section 92BA(i) by the Finance Act, 2017, rendered the decision of the AO and TPO invalid. The Tribunal upheld the CIT (A) decision based on the authoritative principles enunciated by the Hon'ble Supreme Court. Consequently, the Revenue's appeal was dismissed. Ground Number 2 was also dismissed as it was general in nature and no additional grounds were raised by the Revenue.