Your APA with the Board covers later years only. Can you use it to settle the transfer pricing in an earlier year that is still open?
Not as of right, but it is not to be ignored either. Where the transfer pricing issues are identical and the business model has not changed between the year under appeal and the later years covered by the APA, the Mumbai Bench held the APA has persuasive value and the principle it lays down for benchmarking has guidance value for the earlier year. The relief obtained is a remand: the matter goes back to the TPO to decide afresh in the light of the APA.
Decided by the ITAT (Kuldip Singh, Judicial Member and Gagan Goyal, Accountant Member (Mumbai Bench)) on 2022-10-31, reported as ITA No. 2213/M/2017, assessment year 2012-13. It bears on section 92CC, section 92C, section 92CA of the Income Tax Act 1961, in Assessment & Scrutiny and How Tax Law Is Read matters.
This is the cleanest Tribunal formulation of how far an APA reaches backwards outside its rollback. It gives a taxpayer who has settled the same transactions prospectively a route into an open earlier year without a rollback application, and it fixes the two facts that have to be established: identical transfer pricing issues and no change in the business model.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
The assessee provides engineering consultancy and detailed design engineering for chemical and petrochemical plants and turnkey projects. For assessment year 2012-13 its international transactions with associated enterprises exceeded Rs 15 crore and the matter went to the Transfer Pricing Officer, who made an adjustment of Rs 7,60,41,287 (para 3). The Assessing Officer also disallowed software expenses and made a disallowance under s.14A, and the assessment was framed at a total income of Rs 1,14,24,12,474. The assessee had signed an Advance Pricing Agreement with the Central Board of Direct Taxes covering subsequent financial years, in which the most appropriate method and the arm's length price of the same transactions had been agreed. It took a specific ground before the Dispute Resolution Panel that the APA, though for later years, had persuasive value for the year under consideration because the transfer pricing issues were identical and the business model unchanged. The Panel rejected that ground, and grounds 1.1 to 1.10 before the Tribunal carried the point forward.
Grounds 1.1 to 1.10 were decided in the assessee's favour and the transfer pricing issue was remitted. The Bench held that where the transfer pricing issues are identical and there is no change in the business model between the year under consideration and the subsequent years for which an APA has been entered into and complied with, the same APA may be applied to decide the transfer pricing issue (para 7), and that the APA already entered into has persuasive value, so the matter was remitted to the TPO to decide afresh in the light of the APA after giving the assessee an opportunity of being heard (para 10). On the separate ground the Assessing Officer was directed to treat computer software expenses as revenue expenditure, and on a further ground to comply with the Panel's directions within two months. The appeal was allowed for statistical purposes (para 14).
The assessee's case was that the APA, although it pertained to subsequent financial years, had persuasive value (para 5). The Departmental Representative answered that every year must be decided separately on its own facts and circumstances, so an APA between the taxpayer and the Board cannot be applied to the year under consideration (para 6). The Bench found it undisputed that the business model had not changed as against the subsequent financial years, and reasoned from that to the proposition in para 7. It reproduced and adopted the findings of the co-ordinate Bench in FIS Global Business Solutions India Pvt. Ltd. (para 8) and recorded counsel's further reliance on the Delhi High Court in PCIT v. Ameriprise India Pvt. Ltd. and on the Tribunal's orders in Spencer Stuart (India) Pvt. Ltd. and 3I India Pvt. Ltd. (para 9). Reduction of the multiplicity of litigation was part of the Bench's stated reason for taking the APA into account.
APA already entered into between the tax payer and CBDT has the persuasive value
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppNot as of right, but it is not to be ignored either. Where the transfer pricing issues are identical and the business model has not changed between the year under appeal and the later years covered by the APA, the Mumbai Bench held the APA has persuasive value and the principle it lays down for benchmarking has guidance value for the earlier year. The relief obtained is a remand: the matter goes back to the TPO to decide afresh in the light of the APA. This was decided by the ITAT (Kuldip Singh, Judicial Member and Gagan Goyal, Accountant Member (Mumbai Bench)) and bears on section 92CC, section 92C, section 92CA of the Income Tax Act 1961. It is reported as ITA No. 2213/M/2017, assessment year 2012-13. This is the cleanest Tribunal formulation of how far an APA reaches backwards outside its rollback. It gives a taxpayer who has settled the same transactions prospectively a route into an open earlier year without a rollback application, and it fixes the two facts that have to be established: identical transfer pricing issues and no change in the business model. If it applies to you, the first step is this: Put the APA itself on record before the DRP or the Bench, with the covered transactions, the method agreed and the years it applies to.
The assessee provides engineering consultancy and detailed design engineering for chemical and petrochemical plants and turnkey projects. For assessment year 2012-13 its international transactions with associated enterprises exceeded Rs 15 crore and the matter went to the Transfer Pricing Officer, who made an adjustment of Rs 7,60,41,287 (para 3). The Assessing Officer also disallowed software expenses and made a disallowance under s.14A, and the assessment was framed at a total income of Rs 1,14,24,12,474. The assessee had signed an Advance Pricing Agreement with the Central Board of Direct Taxes covering subsequent financial years, in which the most appropriate method and the arm's length price of the same transactions had been agreed. It took a specific ground before the Dispute Resolution Panel that the APA, though for later years, had persuasive value for the year under consideration because the transfer pricing issues were identical and the business model unchanged. The Panel rejected that ground, and grounds 1.1 to 1.10 before the Tribunal carried the point forward. The matter was decided on 2022-10-31 by the ITAT (Kuldip Singh, Judicial Member and Gagan Goyal, Accountant Member (Mumbai Bench)). On those facts the ITAT held as follows. Grounds 1.1 to 1.10 were decided in the assessee's favour and the transfer pricing issue was remitted. The Bench held that where the transfer pricing issues are identical and there is no change in the business model between the year under consideration and the subsequent years for which an APA has been entered into and complied with, the same APA may be applied to decide the transfer pricing issue (para 7), and that the APA already entered into has persuasive value, so the matter was remitted to the TPO to decide afresh in the light of the APA after giving the assessee an opportunity of being heard (para 10). On the separate ground the Assessing Officer was directed to treat computer software expenses as revenue expenditure, and on a further ground to comply with the Panel's directions within two months. The appeal was allowed for statistical purposes (para 14).
The assessee's case was that the APA, although it pertained to subsequent financial years, had persuasive value (para 5). The Departmental Representative answered that every year must be decided separately on its own facts and circumstances, so an APA between the taxpayer and the Board cannot be applied to the year under consideration (para 6). The Bench found it undisputed that the business model had not changed as against the subsequent financial years, and reasoned from that to the proposition in para 7. It reproduced and adopted the findings of the co-ordinate Bench in FIS Global Business Solutions India Pvt. Ltd. (para 8) and recorded counsel's further reliance on the Delhi High Court in PCIT v. Ameriprise India Pvt. Ltd. and on the Tribunal's orders in Spencer Stuart (India) Pvt. Ltd. and 3I India Pvt. Ltd. (para 9). Reduction of the multiplicity of litigation was part of the Bench's stated reason for taking the APA into account. In the words reproduced by the source cited on this page: "APA already entered into between the tax payer and CBDT has the persuasive value" The decision followed or applied FIS Global Business Solutions India Pvt. Ltd. v. DCIT (ITA No. 422/Del/2019, order dated 18 June 2020) - findings reproduced and adopted at para 8.
It was decided by the ITAT on 2022-10-31 and is reported as ITA No. 2213/M/2017, assessment year 2012-13. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 92CC, section 92C, section 92CA, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. Grounds 1.1 to 1.10 were decided in the assessee's favour and the transfer pricing issue was remitted. The Bench held that where the transfer pricing issues are identical and there is no change in the business model between the year under consideration and the subsequent years for which an APA has been entered into and complied with, the same APA may be applied to decide the transfer pricing issue (para 7), and that the APA already entered into has persuasive value, so the matter was remitted to the TPO to decide afresh in the light of the APA after giving the assessee an opportunity of being heard (para 10). On the separate ground the Assessing Officer was directed to treat computer software expenses as revenue expenditure, and on a further ground to comply with the Panel's directions within two months. The appeal was allowed for statistical purposes (para 14). It arises in Assessment & Scrutiny and How Tax Law Is Read matters, on section 92CC, section 92C, section 92CA of the Income Tax Act 1961, and was decided by Kuldip Singh, Judicial Member and Gagan Goyal, Accountant Member (Mumbai Bench). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Build the no-change case on facts, not assertion: compare the FAR, the transaction categories and the business model of the year under appeal with the APA years side by side. Ask in terms for a remand to the TPO to benchmark in the light of the APA, which is the relief actually granted here, rather than for a direction to adopt the APA margin. Do not let the persuasive-value argument displace your primary benchmarking case; the Bench remitted the issue rather than deleting the adjustment. Where the APA year is still open to a rollback application under Rule 10MA, check that route first; guidance value is the fallback, not the first answer.
Searched for later treatment; none was found. That is not the same as a source affirming it. No judgment applying, doubting or overruling this order could be opened. A general web search for later Tribunal decisions taking up its persuasive-value formulation returned only commentary and company records, and commentary is not a source this library will rely on. The status is therefore the honest one for a 2022 Bench order whose reasoning has not been traced into a later judgment read here. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order does not cite s.92CC, s.92CD or Rule 10MA anywhere; the APA point is decided as a matter of general transfer pricing principle. Section 92CC is listed above as the statutory home of the agreement so the entry is findable, not because the Bench referred to it. The order also does not say which assessment years the APA covered, when it was signed, or what method it fixed - only that it was for 'subsequent financial years'. The relief is a remand for fresh benchmarking in the light of the APA, not a direction to adopt the APA result, and the entry should not be cited for more than that. The authorities at para 9 (Ameriprise, Spencer Stuart, 3I India) are recorded as counsel's reliance; only the FIS Global extract at para 8 is plainly adopted in the Bench's own reasoning. The bench, date of pronouncement and appeal number match the discovery record. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Grounds 1.1 to 1.10 were decided in the assessee's favour and the transfer pricing issue was remitted. The Bench held that where the transfer pricing issues are identical and there is no change in the business model between the year under consideration and the subsequent years for which an APA has been entered into and complied with, the same APA may be applied to decide the transfer pricing issue (para 7), and that the APA already entered into has persuasive value, so the matter was remitted to the TPO to decide afresh in the light of the APA after giving the assessee an opportunity of being heard (para 10). On the separate ground the Assessing Officer was directed to treat computer software expenses as revenue expenditure, and on a further ground to comply with the Panel's directions within two months. The appeal was allowed for statistical purposes (para 14).
TaxSphere, “Aker Powergas Pvt Ltd v DCIT”, https://taxnotice.vittsphere.com/caselaw/case/aker-powergas-v-dcit-apa-guidance-value-for-an-earlier-year/ (validity last checked 2026-09-16)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
Your APA was concluded after the appeal was filed. Can you raise it as a fresh ground before the Tribunal for an earlier year, and does it dispose of the comparables fight?
Your APA has no rollback for the year under appeal. Can you still make the TPO benchmark that year on the APA's method and tested party?
Your APA for a later year accepts the foreign associated enterprise as the tested party. Can the TPO still make you the tested party in an open earlier year?
My APA has expired. The TPO now wants to benchmark an open year against the margin agreed in it. Can he?
