Point of Law: Article 265 of Constitution of India which stipulates that no tax shall be levied except authority of law.

JUDGMENT :

K.Somashekar, J.

1. This appeal is filed by the revenue challenging the order dated 20.10.2016 passed by the Income Tax Appellate Tribunal, Bengaluru Bench ‘C’ in IT (TP) A No.182 (BANG) 2014 and thereby seeking to confirm the order dated 28.02.2013 passed by the Deputy Commissioner of Income Tax Central Circle 1(3), Bengaluru.

2. Heard the learned Standing Counsel Sri.Y.V.Raviraj for the appellant / Revenue and the learned counsel Sri.Mayank Jain for the respondent / Assessee. Perused the order passed by the Income Tax Appellate Tribunal, Bengaluru including the order passed by the Deputy Commissioner of Income Tax, Central Circle 1(3), Bengaluru.

3. The factual matrix of the case is that the assessee e-filed its return of income for the assessment year 2009-10 declaring an income of Rs.486,38,96,690/-. The case was selected for scrutiny and the assessment was completed under Section 143(3) read with Section 144C(13) of the Income Tax Act on 31.12.2013, determining total income at Rs.10,86,34,35,052/- by making various additions, which reads as under:

4. Aggrieved by the above additions, the assessee preferred an appeal before the Tribunal against the additions made hereinabove, which came to be allowed.

5. It is stated in the appeal that during the assessment proceedings, it was observed that, M/s GLA Trading International Pvt. Ltd, is an ‘associated enterprise' (for short ‘AE’) of the assessee respondent within the meaning of section 92A based on the fact that Sri.Gali Janardhana Reddy, Director of tax payer company was appointed as Director of M/s.GLA Trading International Pvt. Ltd., on 19.12.2007. Subsequently, on 21.12.2007, issued and paid-up shares of the company (of the value of 1 Singapore dollar), which was hitherto held by Sri.Arangannal, was transferred to M/s.GJR Holdings International Ltd., another company registered in the Isle of Man of which Sri.Gali Janardhana Reddy is one of the Directors as confirmed by Sri.Gali Janardhana Reddy, in his statement recorded on 29.12.2009, before the Deputy Commissioner of Income Tax, Central Circle-1(3), Bengaluru. It was seen that the entire issued and paid-up share capital of M/s.GLA Trading International Pvt. Ltd., was held by M/s.GIR Holdings International Company (M/s.GJR Holdings International), where he had control over the activities and management of the said company. In brief, these facts clearly established that the assessee respondent company and M/s.GLA Trading Pvt. Ltd., Singapore, are AEs. within the meaning of section 92A of the income Tax Act, 1961.

6. It is further stated that the matter was referred to the Transfer Pricing Officer and subsequently an order under Section 92CA came to be passed on 23.01.2013 making the following adjustment to the admitted value of international transactions.

7. It is further stated that the draft assessment order came to be passed under section 144C read with Section 143(3) of the Income Tax Act, 1961 by adopting the above adjustments to the value of the international transactions and the income of the assessee came to be upwardly revised by an amount of Rs.112,20,92,081/-. The assessee filed an appeal before the ‘Dispute Resolution Panel' (DRP) Bengaluru, which by its order dated 29.11.2013, upheld the adjustments proposed in the draft order. Accordingly, the assessment was completed by upwardly revising the income of the assessee to the extent of Rs.11