ORDER

Per Bench:

1. This is a batch of four appeals consisting of a set of 2 cross-appeals pertaining to Assessment Years 2011-2012 and 2012-2013. Since common issues were raised in the appeals, the same were heard together and are, therefore, being disposed off by way of a common order.

Assessment Year 2011-2012

ITA No.7027/Mum/2016 [Assessee’s Appeal] &

ITA No.7292/Mum/2016 [ Revenue’s Appeal]

2. We would first take up cross-appeals for Assessment Year 2011- 2012 arising from order dated, 31/08/2016, passed by the Commissioner of Income Tax (Appeals)-56, Mumbai [hereinafter referred to as the ‘CIT(A)’] whereby the Ld. CIT(A) had partly allowed the appeal of the Assessee against the Assessment Order, dated 25/03/2015, passed under Section 143(3) read with Section 144(C)(3) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’].

3. The relevant facts in brief are that the Assessee, a commercial bank, filed its original return of income for Assessment Year 2011-2012 on 28/11/2011 declaring the total income of INR.6269,23,75,570/- which was revised on 29/03/2013 declaring total income of INR.5456,09,08,140/-. The case of the Assessee was selected for regular scrutiny. During the assessment proceedings, a reference under Section 92CA(1) of the Act was made to the Transfer Pricing Officer (the ‘TPO’) on 22/10/2013 for determination of Arm’s Length Price (ALP) in relation to the International Transactions with Associated Enterprises (AEs). The TPO, vide Order, dated 29/01/2015, passed under Section 92CA(3) of the Act made upwards adjustment of INR.1,65,65,575/- in the ALP of the following International Transaction with AEs:

 :

The Assessing Officer incorporated by the above transfer pricing adjustments in the Draft Assessment Order, dated 27/02/2015, and proposed additional corporate tax additions and disallowances.

4. Since, the Assessee opted not to file objections before the Dispute Resolution Panel against the Draft Assessment Order, the Assessing Officer passed the Assessment Order, dated 25/03/2015 under Section 143(3) read with Section 144(C)(3) of the Act.

5. The Assessee challenged the additions/disallowances made by the Assessing Officer in appeal before the Learned CIT(A) which was disposed off as partly allowed vide Order, dated 31/08/2016.

6. Now, both, the Assessee and the Revenue are in appeal before the Tribunal against the above order passed by the Learned CIT(A).

7. We have heard both the sides and have perused the material on record.

ASSESSMENT YEAR 2011-2012

8. We would first take up the grounds raised by the Revenue along with the connected grounds raised by the Assessee in appeal for the Assessment Year 2011-2012.

ITA No.7292/Mum/2016 [ Revenue’s Appeal] 

Ground No. 1 raised by Assessee

Ground No. 1 raised by Revenue

9. Ground No. 1 raised by the Revenue and Ground No. 1 raised by the Assessee pertain to transfer pricing additions and are, therefore, taken up together.

9.1. Ground No.1 raised by the Revenue reads as under:

“1. Whether on the facts and circumstances of the case, the Ld.CIT(A) erred in holding that the comfort letter/corporate guarantee given to the Monetary Authority of Singapore on behalf of its AE does not constitute to be an international transaction, without appreciating the amended provisions of section 92B(1) Explanation(c) of the Income Tax Act.”

9.2. Ground No.1 raised by the Assessee reads as under:

“1. Adjustment as per Transfer Pricing Order under section 92CA(3) – INR.1,34,15,865 On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the comparables taken by the Transfer Pricing Officer [TPO] vide his order dated January 29, 2015 passed under section 92CA(3) of the Act and confirming the adjustment made to the arm’s length price in respect of back office support services.”

10. The relevant facts in brief ar