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2024 (2) TMI 1487 - HC - Income TaxTP Adjustment - whether the guide-lines laid down under the Act and Rules are followed while determining the ALP by the Tribunal or not and whether the findings are perverse or not? - HELD THAT - We agree with Mr. Shah that in the case at hand while passing the order this Court has not refused to scrutinise the Tribunal s findings on the ALP. This Court has considered the matter on merits and came to the conclusion that no substantial questions of law arise. We are also informed by Mr. Shah that the two judgments in Aptara Technology (P) Ltd 2018 (4) TMI 404 - BOMBAY HIGH COURT and PTC Software (I) (P.) Ltd. 2018 (4) TMI 1002 - BOMBAY HIGH COURT on which the Court had relied upon have attained finality. In the case of Aptara (Supra) Revenue did not challenge it in the Apex Court and in the case of PTC Software (Supra) the appeal that was filed by Revenue was withdrawn.
Issues:
1. Finality of Arm's Length Price determination by Tribunal under Section 260A of the Income Tax Act. 2. Scrutiny of Tribunal's findings on Arm's Length Price by High Court. 3. Rejection of comparables in transfer pricing adjustments. Analysis: Issue 1: Finality of Arm's Length Price determination by Tribunal under Section 260A of the Income Tax Act The High Court considered whether the determination of the Arm's Length Price (ALP) by the Tribunal attains finality and whether the High Court can review such determination under Section 260A of the Income Tax Act. The Apex Court clarified that the High Court can examine if the guidelines under the Act and Rules were followed while determining the ALP and whether the Tribunal's findings on the ALP were perverse. The High Court agreed that it can scrutinize the Tribunal's findings on the ALP in each case. Issue 2: Scrutiny of Tribunal's findings on Arm's Length Price by High Court In the specific case at hand, the High Court had previously dismissed an appeal challenging the Tribunal's findings on the ALP. The Court concluded that it had considered the matter on merits and found no substantial questions of law. The Court listed questions related to transfer pricing adjustments, where the Tribunal had rejected certain comparables proposed by the Assessee. The Revenue disputed the Tribunal's conclusions regarding these comparables. Issue 3: Rejection of comparables in transfer pricing adjustments The High Court noted that it was unnecessary to delve into the specific reasons cited by the Tribunal for rejecting the proposed comparables. This was because the Court had previously upheld similar conclusions in other cases involving comparable companies. Referring to judgments in cases involving similar issues, the Court found that the Tribunal's rejection of the comparables in the present case was justified. The Court dismissed the appeal based on the alignment of its decision with the directions given by the Apex Court and the finality of judgments in related cases. In conclusion, the High Court affirmed its authority to review the Tribunal's findings on the Arm's Length Price, upheld the rejection of comparables in transfer pricing adjustments, and dismissed the appeals in accordance with previous judgments and the directions provided by the Apex Court.
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