Pr. Commissioner Of Income Tax, Udaipur, Udaipur v. M/S Secure Meters Ltd., E-Class, Pratapnagar Industrial Area,Udaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR D.B. Income Tax Appeal No. 139/2018 Pr. Commissioner Of Income Tax, Udaipur, Udaipur ----Appellant Versus M/s Secure Meters Ltd., E-Class, Pratapnagar Industrial Area,Udaipur ----Respondent Connected With D.B. Income Tax Appeal No. 142/2018 Pr. Commissioner Of Income Tax, Udaipur, Udaipur ----AppellantVersus M/s Secure Meters Ltd., E-Class, Pratapnagar Industrial Area,Udaipur ----Respondent For Appellant(s) : Mr. K.K. Bissa. For Respondent(s): Mr. Anjay Kothari. HON'BLE THE CHIEF JUSTICE S. RAVINDRA BHAT HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI 29/07/2019 Order 1.The identical questions of law are urged by the Revenue intwo appeals against the same assessee. The question is whetherin the absence of interest, claimed from an Associated Enterprises,(A.E.) notional amounts could be attributed in the income andadjusted to the assessee’s accounts in the Arm’s Length Price(ALP) determination, under Section 92CA(3) of the Income TaxAct, 1961. 2.The assessee’s income tax returns were subject to ALPdetermination by the TPO who added various amounts in the twoassessment years i.e. A.Y. 2013-2014 and 2012-2013. Theassessee appealed to the Appellate Commissioner, one of the contentions urged was that a similar exercise for 2009-2010 hadbeen challenged and the adjustment made was set aside and thesame was accepted by the Revenue. The CIT(A) accepted theappeal and granted relief. The ITA rejected the revenue’s appeal. 3.Learned counsel for the Revenue urged that the assessee’sincome had to suffer the adjustments which the TPO had provisionin the draft order made in his report and which is good to theassessee and the draft assessment order. 4.The assessee, on the other hand, relied upon certainjudgments of different High Courts. In this regard reliance wasplaced upon the Pr. CIT vs. B.C. Management Services (P) Ltd.[(2018) 403 ITR 45 (Del)], Pr. CIT, Alwar Vs. M/s. Gillette IndiaLtd. [DBITA No.341/2017 decided on 06.02.2018]. In B.C.Management Services (P) Ltd (Supra), the Court had heldfollowing Principal CIT vs. Bechtel India (P) Ltd. [IT Appeal No.379/2016 decided on 21.07.2016] that such notional income onaccount of delayed payment by the A.E. cannot be treated as partof the income and made the subject matter of the adjustments. 5.This Court is of the opinion that since no amounts wereadvanced in the instant case, rather the adjustments made onaccount of TPO that ought to have been recovered from thenotional interest, on a subjective assessment of the manner inwhich the businesses run, no question of law arises forconsideration. 6.The appeals are bereft of merit and accordingly dismissed. (DR. PUSHPENDRA SINGH BHATI),J(S. RAVINDRA BHAT),CJAshutosh-32