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?
Yes on both. The Delhi Bench admitted an additional ground raising the APA as a legal issue and held that once an APA has been concluded in the assessee's own case, the same approach and basis are to be adopted for the assessment year before it, where the facts, the law and the FAR are similar. Having allowed that ground, the Bench found it unnecessary to decide the comparability disputes on merits.
Decided by the ITAT (Sushma Chowla, Vice President and Dr. B.R.R. Kumar, Accountant Member (Delhi Bench)) on 2020-07-31, reported as ITA No. 1761/Del/2015, assessment year 2010-11. It bears on section 92CC, section 92C, section 92CA of the Income Tax Act 1961, in Assessment & Scrutiny and Appeals matters.
It answers two practical problems at once. An APA signed after the appeal was filed can be brought in as an additional ground because it is a legal issue, and success on it makes the whole comparables argument academic - which is usually a better outcome than winning three exclusions and losing two.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee is a wholly owned subsidiary of Metal One Corporation, Japan, and has operated since 1 June 2008. It imported steel and allied products from its associated enterprises for resale in India and provided sales support, described as indenting services, to those enterprises. For assessment year 2010-11 a transfer pricing adjustment of Rs 92,84,585 was made on the indenting services, taking the assessed income from the returned Rs 12,08,08,280 to Rs 13,29,17,212. Before the Tribunal the assessee pressed a limited set of comparability objections, contending that if they succeeded its margin would fall within the range, and challenged the inclusion of APITCO Ltd., Global Procurement Consultants Ltd., TSR Darashaw Ltd. and Quippo Valuers and Auctioneers Pvt. Ltd. (paras 9 and 10). It also filed additional ground 9A, that as the facts and the applicable law remained identical in the year under appeal and in the year for which an Advance Pricing Agreement was subsequently entered into, the approach, basis and conclusion reached in the APA years deserved to be consistently applied to the year under appeal. Other grounds concerned depreciation on goodwill, a foreign exchange loss and subscription charges.
Additional ground 9A was admitted as a legal issue and allowed. The Bench held that once the APA has been concluded in the hands of the assessee, the same approach and basis are to be adopted for the assessment year before it, and directed the Assessing Officer and the Transfer Pricing Officer accordingly (para 11). Because that ground was allowed, no adjustment falling to be made on the APA basis, the Bench held it unnecessary to adjudicate the transfer pricing comparability issues on merits (para 12). On the other grounds the goodwill depreciation issue was remitted for verification, the foreign exchange loss disallowance was reversed and the subscription charges ground was partly allowed. In the result the appeal was partly allowed (para 22).
The Bench proceeded on the footing that various Benches of the Tribunal have held that the conclusion reached in APA proceedings deserves to be applied where the facts, circumstances and FAR are similar to the subsequent years, and adopted that line in the assessee's case (para 11). It rested on the Pune Bench in Honeywell Automation India Ltd. and on Ranbaxy Laboratories Ltd., both of which had applied an APA approach to a year the agreement did not itself cover. Having done so, the Bench did not go into whether the four disputed comparables belonged in the set, since the APA basis governed the computation.
once the APA has been concluded in the hands of the assessee then the same approach/basis is to be adopted
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Handle my notice → Ask a CA on WhatsAppYes on both. The Delhi Bench admitted an additional ground raising the APA as a legal issue and held that once an APA has been concluded in the assessee's own case, the same approach and basis are to be adopted for the assessment year before it, where the facts, the law and the FAR are similar. Having allowed that ground, the Bench found it unnecessary to decide the comparability disputes on merits. This was decided by the ITAT (Sushma Chowla, Vice President and Dr. B.R.R. Kumar, Accountant Member (Delhi Bench)) and bears on section 92CC, section 92C, section 92CA of the Income Tax Act 1961. It is reported as ITA No. 1761/Del/2015, assessment year 2010-11. It answers two practical problems at once. An APA signed after the appeal was filed can be brought in as an additional ground because it is a legal issue, and success on it makes the whole comparables argument academic - which is usually a better outcome than winning three exclusions and losing two. If it applies to you, the first step is this: File the additional ground in writing, framed as a legal issue: identical facts and law in the year under appeal and in the year for which the APA was concluded.
The assessee is a wholly owned subsidiary of Metal One Corporation, Japan, and has operated since 1 June 2008. It imported steel and allied products from its associated enterprises for resale in India and provided sales support, described as indenting services, to those enterprises. For assessment year 2010-11 a transfer pricing adjustment of Rs 92,84,585 was made on the indenting services, taking the assessed income from the returned Rs 12,08,08,280 to Rs 13,29,17,212. Before the Tribunal the assessee pressed a limited set of comparability objections, contending that if they succeeded its margin would fall within the range, and challenged the inclusion of APITCO Ltd., Global Procurement Consultants Ltd., TSR Darashaw Ltd. and Quippo Valuers and Auctioneers Pvt. Ltd. (paras 9 and 10). It also filed additional ground 9A, that as the facts and the applicable law remained identical in the year under appeal and in the year for which an Advance Pricing Agreement was subsequently entered into, the approach, basis and conclusion reached in the APA years deserved to be consistently applied to the year under appeal. Other grounds concerned depreciation on goodwill, a foreign exchange loss and subscription charges. The matter was decided on 2020-07-31 by the ITAT (Sushma Chowla, Vice President and Dr. B.R.R. Kumar, Accountant Member (Delhi Bench)). On those facts the ITAT held as follows. Additional ground 9A was admitted as a legal issue and allowed. The Bench held that once the APA has been concluded in the hands of the assessee, the same approach and basis are to be adopted for the assessment year before it, and directed the Assessing Officer and the Transfer Pricing Officer accordingly (para 11). Because that ground was allowed, no adjustment falling to be made on the APA basis, the Bench held it unnecessary to adjudicate the transfer pricing comparability issues on merits (para 12). On the other grounds the goodwill depreciation issue was remitted for verification, the foreign exchange loss disallowance was reversed and the subscription charges ground was partly allowed. In the result the appeal was partly allowed (para 22).
The Bench proceeded on the footing that various Benches of the Tribunal have held that the conclusion reached in APA proceedings deserves to be applied where the facts, circumstances and FAR are similar to the subsequent years, and adopted that line in the assessee's case (para 11). It rested on the Pune Bench in Honeywell Automation India Ltd. and on Ranbaxy Laboratories Ltd., both of which had applied an APA approach to a year the agreement did not itself cover. Having done so, the Bench did not go into whether the four disputed comparables belonged in the set, since the APA basis governed the computation. In the words reproduced by the source cited on this page: "once the APA has been concluded in the hands of the assessee then the same approach/basis is to be adopted" The decision followed or applied Honeywell Automation India Ltd. v. ACIT (ITA No. 359/Pune/2013, order dated 2 November 2018) - relied on at para 11; Ranbaxy Laboratories Ltd. (ITA No. 196/Del/2013, order dated 25 April 2016) - relied on at para 11.
It was decided by the ITAT on 2020-07-31 and is reported as ITA No. 1761/Del/2015, assessment year 2010-11. 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. Additional ground 9A was admitted as a legal issue and allowed. The Bench held that once the APA has been concluded in the hands of the assessee, the same approach and basis are to be adopted for the assessment year before it, and directed the Assessing Officer and the Transfer Pricing Officer accordingly (para 11). Because that ground was allowed, no adjustment falling to be made on the APA basis, the Bench held it unnecessary to adjudicate the transfer pricing comparability issues on merits (para 12). On the other grounds the goodwill depreciation issue was remitted for verification, the foreign exchange loss disallowance was reversed and the subscription charges ground was partly allowed. In the result the appeal was partly allowed (para 22). It arises in Assessment & Scrutiny and Appeals matters, on section 92CC, section 92C, section 92CA of the Income Tax Act 1961, and was decided by Sushma Chowla, Vice President and Dr. B.R.R. Kumar, Accountant Member (Delhi 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. Support it with the APA and with a FAR comparison for the appeal year and the APA year; the Bench's condition is similarity of facts, circumstances and FAR. Press the additional ground first and ask that the comparability grounds be left undecided only if the APA ground is allowed, so you do not lose them if it is not. Ask for the direction in the Bench's own terms - that the same approach and basis as the APA be adopted for the year under appeal - and take the recomputation back to the Assessing Officer and TPO.
Searched for later treatment; none was found. That is not the same as a source affirming it. No decision applying, doubting or overruling this order was located and opened. The order itself sits in a line - Honeywell Automation and Ranbaxy Laboratories before it, and the Mumbai Bench in Aker Powergas after it reasoning to the same effect - but no later judgment was read here that cites this order by name. 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; the APA point is decided on the general principle of consistency, and s.92CC is listed above only so the entry is findable. The order does not state which assessment year the APA covered or when it was signed, so it is no authority on how far back the approach may be carried - only that where the facts and FAR are similar, it is carried. The Bench gives no separate reasoning for admitting the additional ground beyond treating it as a legal issue. The Ranbaxy Laboratories order relied on at para 11 is ITA No. 196/Del/2013 dated 25 April 2016, which is a different order from the Ahmedabad Bench order of 5 September 2019 in IT(TP)A No. 1782/Del/2014 also held in this library. Bench, date 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.
Additional ground 9A was admitted as a legal issue and allowed. The Bench held that once the APA has been concluded in the hands of the assessee, the same approach and basis are to be adopted for the assessment year before it, and directed the Assessing Officer and the Transfer Pricing Officer accordingly (para 11). Because that ground was allowed, no adjustment falling to be made on the APA basis, the Bench held it unnecessary to adjudicate the transfer pricing comparability issues on merits (para 12). On the other grounds the goodwill depreciation issue was remitted for verification, the foreign exchange loss disallowance was reversed and the subscription charges ground was partly allowed. In the result the appeal was partly allowed (para 22).
TaxSphere, “Metal One Corporation India Pvt Ltd v DCIT”, https://taxnotice.vittsphere.com/caselaw/case/metal-one-corporation-india-v-dcit-apa-as-an-additional-ground/ (validity last checked 2026-09-16)
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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?
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?
