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TMI Blog2016 (8) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before us. The finding of the Tribunal that no adjustment is called for in the price paid by the Assessee for import of pigments for its AE's is a finding of fact which is not shown to be perverse and/or arbitrary. Technical knowhow/ Consultancy Fee -The finding of the Tribunal that the agreement for technical knowhow / consultancy was in respect of all the twelve services and Respondent-Assessee could avail of all or any one of these twelve areas listed out in the agreement as and when the need arose. We find the Agreement is similar to a retainer agreement. Consequently, the finding of the Assessing Officer attributing nil value to nine of the services listed in the agreement which were not availed of by the Respondent-Assessee in the present facts was not justified. Moreover, not adopting one of the mandatorily prescribed methods to determine the ALP in respect of fees of technical services payable by the Respondent-Assessee to its AE, makes the entire Transfer PricingAgreement unsustainable in law. Entitlement to deduction under Section 80HHC - non reduction of the amount credited to the Profit & Loss Account on revaluation of assets - Held that:- Explanation (baa) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'AND' and this expression is in addition to the expression deduction to the extent of SUCH [as per provision of Section 80IA( 9) 80B( 13)] profits and gains shall not be allowed under any other provisions of this Chapter? . 3. Re: Question (a): The aforesaid question raises two issues with regard to Arms Length Price (ALP) in respect of import of pigment and import of technical knowhow/ consultancy by the Respondent-Assessee from its Associated Enterprises (AE). We shall consider each of them separately. (I) Pigments: (a) The impugned order of the Tribunal held that no Transfer Pricing Adjustment is required to arrive at the ALP in respect of import of pigment. This, inter alia, on the basis that the consideration paid for import of pigments to its AE was less than the normal consideration as evidenced by imposition of antidumping duty on its import of pigment under the Customs Tariff Act, 1975. This antidumping duty, the impugned order holds though imposed by order dated 30th November, 2004 was a result of enquiry from period 1st April, 2002 to 30th September, 2003 and thus relevant to determine the ALP. (b) The only grievance of the Revenue urged bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the three technical services which the Respondent-Assessee availed of and held that no consideration was payable in respect of nine services provided for in the agreement. Thus the entire payment of ₹ 1.57 Crores was attributable only to the three services availed out of the twelve listed out in the Agreement. It further held that only ₹ 40 lakhs could be considered as ALP attributable to three services and made adjustment of ₹ 1.17 Crores resulting in its addition to the taxable income. In appeal, the CIT(A) upheld addition of ₹ 1.17 Crores made and taxable income consequent to the adjustment made on the account of technical knowhow/ consultancy agreement. (b) On further appeal, the impugned order of the Tribunal upheld the submission of Respondent-Assessee that in terms of the Agreement, the AE was obliged to provide technical assistance in the 12 areas listed in the Agreement. There was no obligation upon the Respondent-Assessee to obtain technical assistance in all the 12 areas listed in the Agreement . The Respondent-Assessee could ask for assistance in the areas required and the AE was obliged to give it. It is for the availability of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts was not justified. Moreover, not adopting one of the mandatorily prescribed methods to determine the ALP in respect of fees of technical services payable by the Respondent-Assessee to its AE, makes the entire Transfer PricingAgreement unsustainable in law. (e) In view of the above, the finding of fact arrived at by the Tribunal that ₹ 1.57 Crores paid by it to its AE is in respect of its right to avail and the obligation of the AE to provide technical assistance in any of the twelve services listed out in the technical knowhow agreement entered into between Respondent-Assessee with its AE is not shown to be perverse. The view taken by the Tribunal in the present facts is a possible view. (f) Accordingly, question as framed for our consideration, does not give rise to any substantial question of law. Thus, not entertained. 4. Re: Question (b): (a) The Respondent-Assessee had an the earlier previous year, revalued its assets which resulted in a loss. However, in the previous year relevant to the subject Assessment Year, the amount debited on account of revaluation to the Profit Loss Account in the earlier year, was reversed. Consequently, on reversal, the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the impugned order of the Tribunal has allowed concurrent deduction under Sections 80HHC and 80IB of the Act. This by following the decision of this Court in Associated Capsules P. Ltd., v/s. Deputy Commissioner of Income Tax 332 ITR 42. (b) Mr. Suresh Kumar, learned Counsel appearing for the Revenue does not dispute the fact that this issue is covered by the decision of this Court in Associated Capsules (P) Ltd., (supra). However, he invites our attention to the decision of the Apex Court in Assistant Commissioner of Income Tax, Bangalore v/s. Micro Labs Ltd., 380 ITR 1 wherein an identical issue as arising in this question has been referred by the Apex Court to a Larger Bench. The decision of the Larger Bench is still awaited. Thus, he requests that this question be admitted for consideration. We see no reason to admit the present question. This for the reasons as the issue stands concluded by the decision of a Coordinate bench of this Court in the Associated Capsules P. Ltd.,(supra) which is binding upon us, as it has not been stayed. (c) In the above view, the question of law (c) as formulated for our consideration, does not give rise to any substantial question o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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