M/S. SEG AUTOMOTIVE INDIA PRIVATE LIMITED ,BENGALURU V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(3), BENGALURU

ITTPA 1889/BANG/2024

AI Insights

The case involves SEG Automotive India Pvt. Ltd., which appealed against the order of the Deputy Commissioner of Income Tax (DCIT), Central Circle 2(3), Bengaluru, concerning the assessment year 2020-21. The primary contention was regarding the Transfer Pricing adjustments made by the TPO, particularly related to royalty payments. The assessee argued that they were not given a proper opportunity to respond to the TPO's notice due to it being sent to an incorrect email address. The Tribunal found merit in the assessee's argument and restored the matter to the TPO for a fresh assessment. Other related issues, such as interest on receivables, were also sent back for re-examination, while the issue of disallowance of Employee's contributions to ESI & PF was upheld based on existing Supreme Court precedent.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397988 (ITAT-BANGALORE)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 04-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Other Referred Cases: Checkmate Services
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VILAS V. SHINDE
• Assessee Lawyers: AJAY ROTTI
• Keywords: Transfer pricing; International transaction

Judgement Text

"IT(TP)A No.1889/Bang/2024 SEG Automotive India Pvt. Ltd., Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER IT(TP)A No.1889/Bang/2024 Assessment Year: 2020-21 SEG Automotive India Private Limited PB 10011, Naganathapura Electronic City Post Bengaluru 560 100 Karnataka PAN NO : AAHCR6993H Vs. DCIT Central Circle 2(3) Bengaluru APPELLANT RESPONDENT Appellant by : Sri Ajay Rotti, A.R. Respondent by : Sri Vilas V. Shinde, D.R. Date of Hearing : 02.06.2025 Date of Pronouncement : 04.06.2025 O R D E R PER PRAKASH CHAND YADAV, JUDICIAL MEMBER: Present appeal of the assessee is arising from the order of ld. AO dated 29.7.2024 having DIN & Order No. ITBA/AST/S/143(3)/ 2024-25/1067122132(1) and relates to assessment year 2020-21. 2. The brief facts of the case as coming out from the orders of authorities below are that the assessee is a domestic company and formally known as Robert Bosch Starter Motors Generators India Pvt. Ltd. It is engaged in the business of automotive manufacturing operations and generator for the domestic and overseas markets, filed its return of income for the impugned assessment year on 15.2.2021 declaring NIL income and a loss of Rs.1,43,12,530/-. The same was processed u/s 143(1) of the Act and thereafter selected for IT(TP)A No.1889/Bang/2024 SEG Automotive India Pvt. Ltd., Bangalore Page 2 of 3 complete scrutiny, observing international transactions, the AO referred the matter to the TPO. The ld. TPO vide its order dated 26.7.2023 made certain adjustments and determined the TP adjustment of Rs.82,69,37,483/-. Accordingly, the AO passed the draft assessment order. Against which the assessee preferred objections before ld. DRP. The ld. DRP confirmed the additions made by the TPO and thereafter the AO passed the final assessment order. 3. The assessee has raised so many grounds before us. However, at the time of hearing, ld. Counsel for the assessee at the outset argued that matter may be restored to the file of TPO, since the ld. TPO failed to grant meaningful opportunity to the assessee with respect to the adjustments made by the TPO qua royalty paid by the assessee. Ld. Counsel for the assessee drawn the attention of the bench towards page 50 of the TP order to contend that the TPO has issued a notice on 19.7.2023 asking for the objections of the assessee vis-à-vis disallowance of royalty paid by the assessee. Counsel for the assessee contended that the said notice was delivered on wrong e-mail ID and hence could not be complied with by the assessee. It is next submitted that on 24.7.2023 when the assessee came to know about the notice dated 19.7.2023, assessee asked for certain more time to file its reply. However, the TPO could not grant any time and passed the order. 4. Ld. D.R. appearing on behalf of the revenue relied upon the orders of authorities below. However, could not be able to controvert the contention of the assessee regarding the delivery of show cause notice at wrong e-mail ID. 5. We have heard the rival submissions and perused the materials available on record. We observe that it is an admitted position of fact that the TPO has failed to grant sufficient time to the IT(TP)A No.1889/Bang/2024 SEG Automotive India Pvt. Ltd., Bangalore Page 3 of 3 assessee. Therefore, we are of the considered opinion that the matter requires fresh consideration at the end of TPO. We restore this issue of TP adjustment to the file of TPO for determining afresh. We order accordingly. 6. So far as the other issues are concerned i.e. interest on receivables, ld. TPO will also examine this issue afresh and the issue involved in ground No.12 i.e. disallowance of Employee’s contribution of ESI & PF, we are of the view that this issue is no more resintgra in view of the judgment of Hon’ble Apex Court in the case of Checkmate Services and hence it does not require any fresh consideration. With these observations, conclude this matter. 7. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 4th June, 2025 Sd/- (Waseem Ahmed) Accountant Member Sd/- (Prakash Chand Yadav) Judicial Member Bangalore, Dated 4th June, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "