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KEY FINDINGS OF THE HIGH COURT
from #TaxmannPPT | How to Handle Transfer Pricing Litigation – Post Supreme Courts' Decision in SAP Labs
by Taxmann
Facts
• The Karnataka HC was dealing with the Revenue appeal against the Tribunal decision of exclusion of certain comparables and applying RPT filter of 15%.
Decision
• The existence of a substantial question of law is an indispensable requirement for maintaining an appeal before the High Court.
• The entry into the HC under section 260A of the Act is locked with the words "Substantial questions of law“.
• The key to open that lock to maintain such appeal can only be the perversity of the findings of the Tribunal in these type of cases and the perversity in the findings should be established on the basis of cogent material, which was available before the Authorities below including the Tribunal.
• It is not allowed to either of the parties i.e. the Assessee or the Revenue to invoke the jurisdiction under section 260A merely because the Tribunal comes to reverse or modify the findings given by the lower Authority.
• From the scheme of assessment with regard to international transaction, it is clear that the process of determination of ALP has to be undertaken by the Expert Wing of the Income Tax Department which is manned by TPO and at the higher level by a Collegium of three Commissioners in the form of DRP, whose orders on questions of facts are appealable before the highest fact finding body, viz., the Appellate Tribunal.
