COMMISSIONER OF INCOME TAX Vs. SONY MOBILE COMMUNICATIONS

JUDGEMENT

(1.) The Revenue is aggrieved by a decision of the Income Tax Appellate Tribunal (hereafter referred as "ITAT") and impugns it in this appeal under Section 260A of the Income Tax Act, 1961 (hereafter referred as "Act"). It is urged that the ITAT fell into error in reversing the order of the Assessing Officer, who confirmed the transfer pricing analysis by the Transfer Pricing Officer (TPO) in respect of the respondent-assessee's international transactions reported for the assessment years.

(2.) The facts are that the assessee filed its income tax returns on 30.09.2008 declaring income at Rs.53,95,06,079/-. This was processed u/s 143(1) dated 30.11.2008 as declared income. Later, notice under Section 143(2) dated 04.08.2009 and notice along with detailed questionnaire were issued on 02.08.2010 and duly served upon assessee, fixing the case for 25.08.2010. During the course of assessment proceeding, the case was referred to TPO under Section 92CA for computation of the Arm's Length Price (hereafter referred as "ALP"). In the order dated 20.10.2011, under Section 92CA(3), the TPO proposed the ALP adjustments amounting to Rs.69,94,95,650/-. The total income assessed was Rs.1,35,25,96,901/-. The assessee filed an appeal before the ld. ITAT against the order passed by AO under Section 143(3)/144C of the Act who by order dated 30.08.2013 had decided the main issue of transfer pricing adjustment in relation to AMP expenses by setting it aside to the AO/TPO with specific directions based on the decision of the Special Bench of the Tribunal in the case of LG Electronics.

(3.) On the AMP issue, both the department and the assessee had preferred appeals before this court by ITA No. 155/ 2014 and 16/ 2014 respectively. This court's decision dated 16.03.2015 had set aside the matter of AMP to the ITAT to be decided on the principles outlined in the said order of the Court. As the matter of TP adjustment was pending before the ITAT, therefore, an order dated 30.03.2016 was passed under Section 254/143(3) read with Section 144C. Now, ITAT by order dated 26.07.2018 allowed the assessee's appeal with respect to Transfer Pricing adjustment which was remitted by this court to it on the AMP issue.