Madras High Court
The Commissioner Of Income Tax vs M/S.Rotork Controls India Pvt. Ltd on 26 August, 2022
Author: R.Mahadevan
Bench: R. Mahadevan, Mohammed Shaffiq
T.C.A.No.543 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 26.08.2022
CORAM :
THE HON'BLE MR. JUSTICE R. MAHADEVAN
AND
THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ
T.C.A.No.543 of 2019
The Commissioner of Income Tax,
Chennai. ... Appellant
Versus
M/s.Rotork Controls India Pvt. Ltd.,
23B, Ambattur Industrial Estate (North),
Ambattur, Chennai - 600 098. ... Respondent
(PAN No.AACR3438C)
Appeal preferred under Section 260A of the Income Tax Act, 1961,
against the order of the Income Tax Appellate Tribunal, Madras “D” Bench,
dated 14.11.2018 in I.TA.No.2581/Chny/2017.
For Appellant : Mr.T.Ravi Kumar
Senior Standing Counsel
For Respondent : Mr.N.V.Balaji
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T.C.A.No.543 of 2019
JUDGMENT
(Judgment was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 14.11.2018 passed by the Income Tax Appellate Tribunal, Madras 'D' Bench in I.T.A.No.2581/Chny/2017, relating to the assessment year 2013-14, by raising the following substantial questions of law:-
"(i) Whether on the facts and in the circumstances of the case, the Tribunal was right in deleting the downward adjustment made by the Transfer Pricing Officer in respect of management fees paid by the assessee to its Associate Enterprise, merely on the ground that the assessee had proved incurring of such expenditure without going into the merits of contention raised by the TPO in respect of the services received by the assessee?
(ii) Whether on the facts and in the circumstances of the case, the Tribunal was right in not considering the fact that as per the OECD guidelines in respect of the services rendered by the Associate Enterprise to the Assessee fell within the premises of shareholders functions / stewardship services warranting no separate payment for the same?
(iii) Whether for the purpose of determination of Arms Length Price, the price is to be determined on a transaction to transaction basis and not on a consolidated basis as done by the assessee and that the service fee had to be Benchmarked separately by analyzing each of the actual services received from its Associate Enterprise and accordingly Transfer Pricing Officer Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.543 of 2019 was justified in rejecting TNM Method adopted by the Assessee instead of adopting the Comparable Uncontrolled Price (CUP) method which is the most appropriate method to be followed?"
2. When the matter was taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeal shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in this appeal is less than the threshold limit.
3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs.
(R.M.D., J.) (M.S.Q., J.)
26.08.2022
rns
Internet : Yes.
Index : Yes / No.
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T.C.A.No.543 of 2019
R. MAHADEVAN, J.
and
MOHAMMED SHAFFIQ, J.
rns
To
1. The Income Tax Appellate Tribunal
Madras 'D' Bench, Chennai.
2. The Commissioner of Income Tax (Appeals) - 3, Chennai.
3. The Deputy Commissioner of Income Tax, Corporate Circle-5(2), Chennai.
T.C.A.No.543 of 2019
26.08.2022 Page 4/4 https://www.mhc.tn.gov.in/judis