SAFRAN ENGINEERING SERVICES INDIA PRIVATE LIMITED ,BANGALORE V. DCIT, CIRCLE-6(1)(1), BANGALORE

ITTPA 2538/BANG/2024

AI Insights

The case involves Safran Engineering Services India Pvt. Ltd., which appealed against the assessment order passed by the Income Tax Department for the assessment year 2021-22. The primary contention was regarding the upward adjustment made by the AO/TPO on account of interest on outstanding receivables under transfer pricing, amounting to Rs.22,82,444. The Tribunal noted that similar issues had been previously adjudicated in the assessee's own cases for earlier assessment years, where the Tribunal had set aside the issue for fresh adjudication. Following this precedent, the Tribunal decided to remit the issue back to the AO/TPO for a detailed examination and proper benchmarking study as per the Income Tax Rules.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791606 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 12 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 08-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2021-2022
• Appeal Filed On: 26-12-2024
• Other Referred Cases: IT(TP)A No.907/Bang/2022, IT(TP)A No.297/Bang/2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIVYA K.J
• Assessee Lawyers: K.R VASUDEVAN; ANKUR PAI; ADVOCATES
• Keywords: Set aside; Opportunity of being heard; Transfer pricing; International transaction

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER IT(TP)A No.2538/Bang/2024 Assessment Year: 2021-22 Safran Engineering Services India Pvt. Ltd., No.165/5, Artisane Green Space 1st Main, Krishnaraju Layout, Doraisanipalya Bannerghatta Road, Bangalore – 560 076. PAN – AAFCS 9003 D Vs. The Dy. Commissioner of Income Tax, Circle – 6(1)(1), Bangalore. . APPELLANT RESPONDENT Assessee by : Shri K.R Vasudevan & Shri Ankur Pai, Advocates Revenue by : Dr. Divya K.J, CIT (DR) Date of hearing : 12.11.2025 Date of Pronouncement : 08.12.2025 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the assessment order passed by the IT Department vide order dated 29/10/2024 in DIN No. ITBA/AST/S/143(3)/2024-25/1070022613(1) for the assessment year 2021-22. 2. The assessee has raised as many as 11 grounds of appeal disputing the adjustment made on account of interest on the receivables Printed from counselvise.com IT(TP)A No.2538/Bang/2024 Page 2 of 5 . under transfer pricing. As such adjustment was challenged by the assessee on various grounds. However, at the time of hearing, the ld. AR before us submitted that the identical issue was also there in the following own case of the assessee in earlier assessment years. 1) Assessee’s own case for AY 2018-19 in IT(TP)A No.907/Bang/2022 2) Assessee’s own case for AY 2017-18 in IT(TP)A No.297/Bang/2022 Accordingly, the ld. AR prayed to gave the similar directions. 3. In the present case, the AO/TPO has made an upward adjustment of Rs.22,82,444/- on account of interest @ 51.86% (6 month Libor) + 450 basis points) on the outstanding receivables beyond 30 days. The ld. DRP also upheld the adjustment mad for the draft assessment order. The AO in the final assessment order dated 29/10/2024 has accordingly made adjustment of Rs.22,82,444/- only to the total income of the assessee. 4. Being aggrieved by the order of AO/TPO and the direction of the ld. DRP, the assessee is in appeal before us. 5. The ld. AR before us submitted that ITAT in the own case of the assessee has set aside the identical issue to the file of the TPO for fresh adjudication. The ld. AR accordingly prayed for issuing similar direction in the case on hand. 6. On the other hand, the ld. DR could not controvert the argument advanced by the ld. AR for the assessee. 7. We have heard the rival contentions of both the parties and perused the materials on record. At the outset, we note that there was Printed from counselvise.com IT(TP)A No.2538/Bang/2024 Page 3 of 5 . identical issue raised by the assessee for the asst. year 2017-18 in ITA No.297/Bang/ 2022 wherein the ITAT has set aside the issue to the file of the AO/TPO for fresh adjudication. The relevant extract is reproduced as under:- “6. Having heard the rival submissions' of the parties, we are of the considered view that there is merit in the contentions raised by the ld.AR. As rightly submitted by the Id. AR, the ALP of the international transactions have to be determined by following one of the prescribed methods under the I.T. Rules. Admittedly, the TPO/DRP in the instant case has not followed the same. Accordingly, we deem it proper to remit the issue to the file of AO/TPO for determining the ALP with regard to interest on delayed receivables by following the Rules with a proper benchmarking stud . he AO/TPO is also directed to rectify the mistakes done in computation of interest raised by the assessee. Needless to say that the assessee may be given a reasonable opportunity of being heard. The assessee is free to raise all the contentions before the AO/TPO. 7. In the result, the appeal by the assessee is allowed for statistical purposes.” 7.1 As the facts of the case on hand are identical to the facts of the case discussed above, therefore, respectfully following the order of the ITAT discussed above, we set aside the issue to the file of the AO/TPO for fresh adjudication in the light of the above stated discussion and as per the provisions of law. Hence, the ground of appeal of the assessee is allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in court on 8th day of December, 2025 Sd/- Sd/- (KESHAV DUBEY) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 8th December, 2025 Printed from counselvise.com IT(TP)A No.2538/Bang/2024 Page 4 of 5 . / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore Printed from counselvise.com IT(TP)A No.2538/Bang/2024 Page 5 of 5 . Printed from counselvise.com "