INCOME TAX ACT, 1961

Section 92CA read with section 92BA

Transfer pricing - Computation of ALP - Omission of Clause (i) of section 92BA with effect from 1-4-2017 whether applicable retrospectively -

AO made reference to TPO under section 92CA to determine arms length price as assessee entered into specified domestic transaction. Case of revenue was that assessee was covered under section 92BA. Tribunal held that Clause (i) of section 92BA which had been omitted with effect from 1-4-2017 would be applicable retrospectively. Revenue contended that Tribunal was unjustified in presuming retrospectivity, particularly when statue itself explicitly stated it to be prospective in nature. Held: When clause (i) of section 92BA having been omitted by the Finance Act, 2017, with effect from 1-7-2017 from Statute, the resultant effect is that it had never been passed and to be considered as a law never been existed. Thus, decision taken by AO under the effect of section 92BA and reference made to order of TPO under section 92CA was invalid and bad in law. Order passed by Tribunal was justified.

Followed:General Finance Co. & Anr. v. Asstt. CIT 2002 TaxPub(DT) 1644 (SC) Kolhapur Canesugar Works Ltd. v. Union of India AIR 2000 SC 811 : 2000 TaxPub(EX) 1248 (SC) M/s. Texport Overseas Private Limited v. The Dy. CIT [IT(TP)A No. 2213/Bang/2018, dt. 12-9-2018] Texport Overseas Private Limited v. Dy. CIT [IT(TP)A No. 1722/Bang/2017, dt. 22-12-2017]

REFERRED : The CIT, He Asstt. CIT, Circle-11 (3), Bangalore v. M/s. G.E. Thermometrics India (P) Ltd. [I.T.A. No. 424/2009, dt. 22-3-2018]

FAVOUR : In assessee's favour

A.Y. : 2013-14 & 2014-15

INCOME TAX ACT, 1961

Section 14A

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