A bilateral APA signed years after the assessment fixes my margin for a run of years and MAP has settled the rest. What do I do with the appeals still pending for those years, and do my other grounds go with them?
The transfer pricing grounds go, the rest stay. Where a bilateral APA executed with both revenue authorities fixes the arm's length margin for the years under appeal and the MAP proceedings have been settled, the Tribunal allows the assessee to withdraw its transfer pricing grounds in compliance with Rule 44G and dismisses the Revenue's transfer pricing grounds as settled. The corporate tax grounds are decided on their merits in the same order.
Decided by the ITAT (Shri Amit Shukla, Judicial Member and Ms Padmavathy S, Accountant Member) on 2025-02-24, reported as ITA No. 1123/Mum/2015 and ITA No. 1280/Mum/2015 (assessment year 2010-11) and ITA No. 7438/Mum/2018 (assessment year 2014-15), ITAT Mumbai 'J' Bench. No reporter citation was printed on the page read.. It bears on section 92CC, section Rule 44G, section 92CA, section 14A of the Income Tax Act 1961, in Appeals, Assessment & Scrutiny and Deductions & Disallowances matters.
This is the order to reach for when a bilateral APA lands mid-appeal covering several years at once. It shows the mechanics: the BAPA margin governs, MAP closes the bilateral side, the transfer pricing grounds on both sides come off the board, and the appeal continues for everything else.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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Three appeals were heard together: the Revenue's and the assessee's cross-appeals for assessment year 2010-11 and the assessee's appeal for assessment year 2014-15. A Bilateral Advance Pricing Agreement was executed on 28 March 2022 between the Indian revenue authorities, HM Revenue and Customs, the assessee and its associated enterprise Unilever Plc. It fixed the arm's length OP/OC margin for the R&D services segment at 16.7 per cent and covered assessment years 2010-11 to 2014-15. On that margin there was no adjustment for assessment years 2010-11 to 2012-13 because the assessee's margin exceeded 16.7 per cent, while for assessment years 2013-14 and 2014-15 an adjustment was agreed because the margin fell below it. The MAP proceedings were settled by letter dated 11 October 2023 from the Indian revenue authorities. Apart from transfer pricing, the appeals raised a s.14A disallowance and a disallowance of consultancy charges of Rs. 49,27,292.
On the transfer pricing side the Tribunal recorded the BAPA margin of 16.7 per cent and the outcome year by year, permitted the assessee's transfer pricing grounds to be withdrawn in compliance with Rule 44G so as to give finality to the MAP resolution, and dismissed the grounds raised by the Revenue as the transfer pricing issues had been settled under BAPA and MAP (paras 2, 7 and 8). On the other grounds the s.14A disallowance was restricted to the exempt income of Rs. 11,250 and the disallowance of consultancy charges was deleted. The Revenue's appeal in ITA No. 1123/Mum/2015 was dismissed and the assessee's appeals in ITA No. 1280/Mum/2015 and ITA No. 7438/Mum/2018 were partly allowed.
The Tribunal treated the bilateral agreement as determinative of the arm's length margin for every year it covered, because the revenue authorities of both countries had agreed on it. Applying that margin, the years in which the assessee's own OP/OC exceeded 16.7 per cent needed no adjustment at all, which disposed of the Revenue's grounds without any independent benchmarking exercise. The withdrawal of the assessee's own transfer pricing grounds was allowed on the footing that Rule 44G requires the domestic proceedings to be brought to an end so that the MAP resolution is final. On s.14A the Tribunal applied the familiar limit of the exempt income actually earned. On consultancy charges it followed the treatment accepted in the earlier and later years and held that once the bills were produced the purchases could not be doubted.
the grounds raised by the Revenue are dismissed
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Handle my notice → Ask a CA on WhatsAppThe transfer pricing grounds go, the rest stay. Where a bilateral APA executed with both revenue authorities fixes the arm's length margin for the years under appeal and the MAP proceedings have been settled, the Tribunal allows the assessee to withdraw its transfer pricing grounds in compliance with Rule 44G and dismisses the Revenue's transfer pricing grounds as settled. The corporate tax grounds are decided on their merits in the same order. This was decided by the ITAT (Shri Amit Shukla, Judicial Member and Ms Padmavathy S, Accountant Member) and bears on section 92CC, section Rule 44G, section 92CA, section 14A of the Income Tax Act 1961. It is reported as ITA No. 1123/Mum/2015 and ITA No. 1280/Mum/2015 (assessment year 2010-11) and ITA No. 7438/Mum/2018 (assessment year 2014-15), ITAT Mumbai 'J' Bench. No reporter citation was printed on the page read.. This is the order to reach for when a bilateral APA lands mid-appeal covering several years at once. It shows the mechanics: the BAPA margin governs, MAP closes the bilateral side, the transfer pricing grounds on both sides come off the board, and the appeal continues for everything else. If it applies to you, the first step is this: Put the executed bilateral APA and the competent authority's MAP settlement letter on the record, with the agreed margin and the years each covers.
Three appeals were heard together: the Revenue's and the assessee's cross-appeals for assessment year 2010-11 and the assessee's appeal for assessment year 2014-15. A Bilateral Advance Pricing Agreement was executed on 28 March 2022 between the Indian revenue authorities, HM Revenue and Customs, the assessee and its associated enterprise Unilever Plc. It fixed the arm's length OP/OC margin for the R&D services segment at 16.7 per cent and covered assessment years 2010-11 to 2014-15. On that margin there was no adjustment for assessment years 2010-11 to 2012-13 because the assessee's margin exceeded 16.7 per cent, while for assessment years 2013-14 and 2014-15 an adjustment was agreed because the margin fell below it. The MAP proceedings were settled by letter dated 11 October 2023 from the Indian revenue authorities. Apart from transfer pricing, the appeals raised a s.14A disallowance and a disallowance of consultancy charges of Rs. 49,27,292. The matter was decided on 2025-02-24 by the ITAT (Shri Amit Shukla, Judicial Member and Ms Padmavathy S, Accountant Member). On those facts the ITAT held as follows. On the transfer pricing side the Tribunal recorded the BAPA margin of 16.7 per cent and the outcome year by year, permitted the assessee's transfer pricing grounds to be withdrawn in compliance with Rule 44G so as to give finality to the MAP resolution, and dismissed the grounds raised by the Revenue as the transfer pricing issues had been settled under BAPA and MAP (paras 2, 7 and 8). On the other grounds the s.14A disallowance was restricted to the exempt income of Rs. 11,250 and the disallowance of consultancy charges was deleted. The Revenue's appeal in ITA No. 1123/Mum/2015 was dismissed and the assessee's appeals in ITA No. 1280/Mum/2015 and ITA No. 7438/Mum/2018 were partly allowed.
The Tribunal treated the bilateral agreement as determinative of the arm's length margin for every year it covered, because the revenue authorities of both countries had agreed on it. Applying that margin, the years in which the assessee's own OP/OC exceeded 16.7 per cent needed no adjustment at all, which disposed of the Revenue's grounds without any independent benchmarking exercise. The withdrawal of the assessee's own transfer pricing grounds was allowed on the footing that Rule 44G requires the domestic proceedings to be brought to an end so that the MAP resolution is final. On s.14A the Tribunal applied the familiar limit of the exempt income actually earned. On consultancy charges it followed the treatment accepted in the earlier and later years and held that once the bills were produced the purchases could not be doubted. In the words reproduced by the source cited on this page: "the grounds raised by the Revenue are dismissed"
It was decided by the ITAT on 2025-02-24 and is reported as ITA No. 1123/Mum/2015 and ITA No. 1280/Mum/2015 (assessment year 2010-11) and ITA No. 7438/Mum/2018 (assessment year 2014-15), ITAT Mumbai 'J' Bench. No reporter citation was printed on the page read.. 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 Rule 44G, section 92CA, section 14A, 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. On the transfer pricing side the Tribunal recorded the BAPA margin of 16.7 per cent and the outcome year by year, permitted the assessee's transfer pricing grounds to be withdrawn in compliance with Rule 44G so as to give finality to the MAP resolution, and dismissed the grounds raised by the Revenue as the transfer pricing issues had been settled under BAPA and MAP (paras 2, 7 and 8). On the other grounds the s.14A disallowance was restricted to the exempt income of Rs. 11,250 and the disallowance of consultancy charges was deleted. The Revenue's appeal in ITA No. 1123/Mum/2015 was dismissed and the assessee's appeals in ITA No. 1280/Mum/2015 and ITA No. 7438/Mum/2018 were partly allowed. It arises in Appeals, Assessment & Scrutiny and Deductions & Disallowances matters, on section 92CC, section Rule 44G, section 92CA, section 14A of the Income Tax Act 1961, and was decided by Shri Amit Shukla, Judicial Member and Ms Padmavathy S, Accountant Member. 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. Separate the transfer pricing grounds from the rest of the appeal before you move; only the transfer pricing grounds are withdrawn. Tell the Bench which years show no adjustment on the agreed margin and which years require one, so the withdrawal and the dismissal of the Revenue's grounds can be recorded year by year. Say expressly that the withdrawal is in compliance with Rule 44G, so that the order gives finality to the MAP resolution. Press the surviving corporate tax grounds as usual; here the s.14A disallowance was cut to the exempt income actually earned and the consultancy charges disallowance was deleted.
Searched for later treatment; none was found. That is not the same as a source affirming it. Decided 24 February 2025. No later decision applying, distinguishing or doubting it was located, which is the ordinary position for an order of this age. It records the working out of a bilateral APA and a MAP settlement rather than deciding a contested question of law, so it is unlikely to attract later treatment. 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 discovery record described this as an order in which the assessee withdrew its transfer pricing grounds and the Revenue's grounds were dismissed. That is right so far as it goes, but it is incomplete in two ways worth recording. First, these were three appeals across two assessment years, and the assessee's two appeals were partly allowed, not merely withdrawn: the s.14A disallowance was restricted to the exempt income of Rs. 11,250 and the disallowance of consultancy charges of Rs. 49,27,292 was deleted, and there was a finding on equipment purchases that once the bills were produced no adjustment should have been made. Second, the discovery record gave no sections for those grounds. The single quoted sentence in the discovery record combining BAPA, MAP and the dismissal of the Revenue's grounds could not be located as one continuous sentence in the copy read; the operative words quoted here are taken from para 7. The paragraph numbers given are those returned from the print copy and should be checked against the certified copy before they are cited in a pleading. 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.
On the transfer pricing side the Tribunal recorded the BAPA margin of 16.7 per cent and the outcome year by year, permitted the assessee's transfer pricing grounds to be withdrawn in compliance with Rule 44G so as to give finality to the MAP resolution, and dismissed the grounds raised by the Revenue as the transfer pricing issues had been settled under BAPA and MAP (paras 2, 7 and 8). On the other grounds the s.14A disallowance was restricted to the exempt income of Rs. 11,250 and the disallowance of consultancy charges was deleted. The Revenue's appeal in ITA No. 1123/Mum/2015 was dismissed and the assessee's appeals in ITA No. 1280/Mum/2015 and ITA No. 7438/Mum/2018 were partly allowed.
TaxSphere, “Unilever Industries P. Ltd. v ACIT”, https://taxnotice.vittsphere.com/caselaw/case/unilever-industries-bapa-and-map-settlement-transfer-pricing-grounds-withdrawn/ (validity last checked 2026-09-16)
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My transfer pricing dispute has been settled under MAP and I want to withdraw my appeal. The department has its own cross-appeal before the Tribunal. Does that survive?
Your MAP resolution settles the transactions with the treaty-country associated enterprise. Can the same treatment be claimed for your associated enterprises in other countries?
The competent authorities have settled your case under the mutual agreement procedure and the department still will not give effect to it. What order will the court make?
Your MAP resolution has come through while cross appeals are pending before the Tribunal. What happens to the appeals, and who has to withdraw what?
