Delhi High Court - Orders
Sheela Foam Ltd vs Acit, Central Circle -6, New Delhi on 12 March, 2024
Author: Yashwant Varma
Bench: Yashwant Varma, Purushaindra Kumar Kaurav
$~13
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 1013/2019
SHEELA FOAM LTD. ..... Appellant
Through: Mr. Ajay Vohra, Sr. Adv. with
Mr. Neeraj Jain, Mr. Aniket D.
Agrawal and Ms. Manisha
Sharma, Advs.
versus
ACIT, CENTRAL CIRCLE -6, NEW DELHI
..... Respondent
Through: Mr. Aseem Chawla, Sr.
Standing Counsel along with
Ms. Pratishtha Chaudhary and
Ms. Nivedita, Advs.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR
KAURAV
ORDER
% 12.03.2024
1. Having heard Mr. Vohra, learned senior counsel appearing in support of the appeal as well as Mr. Chawla, learned counsel who represents the respondent and on a perusal of the tabular summary of findings, we are of the considered opinion that the appeal would merit further consideration.
2. From the summary of findings, we note that it is asserted by the appellant that the Transfer Pricing Officer ['TPO'] had ignored the Comparable Uncontrolled Price ['CUP'] method as applied and suggested an adjustment of INR 11,97,14,215/- in respect of inter-unit expenses of the appellant on an ad hoc basis.
This is a digitally signed order.
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3. The appellant contends that the Dispute Resolution Panel ['DRP'] impliedly rejected the procedure adopted by the TPO and accepted the CUP method as being appropriate for the purposes of benchmarking the inter-unit transactions. The appellant however asserts that the Assessing Officer ['AO'] while passing the final assessment order has gone beyond the directions that were framed by the DRP and which was clearly impermissible in law. We consequently admit this appeal on the following questions of law:-
A. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal ['ITAT'] erred in law in holding that the AO/TPO was right in applying the Transactional Net Margin Method ['TNMM'] method, when the DRP had impliedly rejected the said method and upheld the application of CUP method for benchmarking specified domestic transactions, which was blatantly disregarded by the AO/TPO while passing the final assessment order and was therefore beyond jurisdiction?
B. Whether on the facts and in the circumstances of the case, the ITAT erred in law by disregarding the binding directions of the DRP to apply the CUP method, thereby exceeding its jurisdiction?
4. List again on 16.05.2024.
YASHWANT VARMA, J.
PURUSHAINDRA KUMAR KAURAV, J.
MARCH 12, 2024/RW This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/03/2024 at 20:45:05