9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (12) TMI 1166 - AT - Income TaxDeduction u/s. 10AA on account of voluntary adjustment made to arm s length price (ALP) of international transaction pursuant to the Advance Pricing Agreement (APA) - HELD THAT - We find that for AY 2014-15, identical issue arose in assessee s own case which was decided by the coordinate Bench 2020 (9) TMI 68 - ITAT BANGALORE and hold that the ALP adjustment made pursuant to APA by the assessee in respect of Gurgaon SEZ unit results in increase in profits of the business of the undertaking/unit, the increased profits of the assessee being eligible for deduction under section 10AA of the Act given the wide nature of the expression used in section 10AA i.e. 'Profits of the business of the undertaking/unit' and that the proviso to section 92C(4) is not a bar to allowing such a claim. Thus, appellate order passed by the ld. CIT (A) is following the decision of coordinate bench in assessee s own case where in the decision of honorable Karnataka high court 2014 (6) TMI 1007 - KARNATAKA HIGH COURT is followed. Accordingly, this ground of appeal raised by the ld. AO is dismissed and the order of the ld. CIT(A) is upheld.
Issues:
Appeal against appellate order on deduction u/s. 10AA based on voluntary TP adjustment pursuant to APA. Analysis: The appeal was filed by the DCIT against the appellate order passed by the CIT(A) for the assessment year 2017-18, challenging the allowance of deduction u/s. 10AA based on voluntary Transfer Pricing (TP) adjustment made to the arm's length price (ALP) of international transactions pursuant to the Advance Pricing Agreement (APA). The DCIT contended that the CIT(A) erred in relying on a coordinate Bench decision without considering the pending Special Leave Petition (SLP) before the Supreme Court. The assessee, a company, claimed a deduction u/s. 10AA after voluntary TP adjustment, resulting in an increased eligible income for deduction. The DCIT disallowed the deduction, but the CIT(A) deleted the disallowance based on a CBDT Circular and a coordinate Bench decision for a different assessment year with similar facts. The DCIT appealed the decision, citing a delay of 9 days due to annual general transfer as the reason for the delayed filing. The delay was condoned after explanations were provided. The ITAT found the delay justified and admitted the appeal. The ITAT considered the precedent set by a coordinate Bench in the assessee's case for a different assessment year, which allowed deduction under section 10AA for voluntary TP adjustments made pursuant to APA. The ITAT analyzed the proviso to Section 92C(4) of the Act, emphasizing that deductions under section 10AA could be claimed for voluntary adjustments, not TPO-made adjustments. The ITAT upheld the CIT(A)'s order based on judicial precedents and the decision of the coordinate Bench, dismissing the AO's appeal. In conclusion, the ITAT dismissed the appeal by the AO, upholding the CIT(A)'s order allowing the deduction u/s. 10AA based on voluntary TP adjustment pursuant to APA. The decision was based on the interpretation of relevant legal provisions and judicial precedents, including decisions from the coordinate Bench and the Honorable Karnataka High Court.
|
