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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12^TH DAY OF OCTOBER, 2026 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA INCOME TAX APPEAL NO. 105 OF 2026 BETWEEN:

1. THE PR. COMMISSIONER OF INCOME-TAX CENTRAL

3^RD FLOOR C.R. BUILDING QUEEN'S ROAD BENGALURU - 560 001

2. THE DEPUTY COMMISSIONER OF INCOME-TAX Digitally CENTRAL CIRCLE-3(2)

signed by VEERENDRA BENGALURU - 560 001 KUMAR K M …APPELLANTS Location: High (BY SRI E.I. SANMATHI, ADVOCATE)

Court of Karnataka AND:

1. M/S. NSL SUGARS LIMITED NO.60/1, 2^ND CROSS MUSEUM ROAD BENGALURU - 560 025 …RESPONDENT (BY SMT. TANMAYEE RAJKUMAR, ADVOCATE)

THIS ITA IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN IT(TP)A NO.2615/Bang/2024 DATED 08.01.2026 FOR ASSESSMENT YEAR 2021-2022 ANNEXURE-A AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -3(2) BENGALURU & ETC.

THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MRS. JUSTICE K.S. HEMALEKHA

ORAL JUDGMENT

(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

1. The Revenue has filed the present appeal under Section 260A of the Income Tax Act, 1961 [the Act] assailing the order dated 08.01.2026 passed by the learned Income Tax Appellate Tribunal [ITAT] in IT(TP)A No.2615/Bang/2024 preferred by the respondent, M/s NSL Sugar Limited [the Assessee], in respect of the assessment year [AY] 2021-22.

2. The Revenue has projected the following questions for consideration of this Court:

“1. Whether under the facts and circumstances of the case and in law, the Tribunal is right in directing the TPO to accept the transfer price of bagasse adopted by the respondent assessee, without considering that the CERC tariff order for Financial Year 2021-22 was based on contemporaneous market data and demand-

supply analysis?

2. Whether under the facts and circumstances of the case and in law, the Tribunal has not erred in taking a self-contradictory approach in directing the TPO to accept the ALP of bagasse based on KERC tariff order for Financial Year 2018 while rejecting the CERC tariff order for Financial Year 2021 without establishing the greater comparability of KERC tariff as per the provisions of section?

3. Whether under the facts and circumstances of the case and in law, the Tribunal is right in disregarding the CERC tariff order, which is a credible and authoritative benchmark for fuel cost of bagasse, and instead relying upon the computation made based on FRP of sugarcane, which is only an estimate?

4. Whether under the facts and circumstances of the case and in law, the Tribunal is right in accepting the transfer price of the respondent, despite the TPO having relied on credible, authoritative, and contemporaneous data?

5. Whether under the facts and circumstances of the case and in law, the Tribunal ought to have carried out a fresh analysis as per the provisions of section 92 to 92C of Income Tax Act, 1961 and Rule 10B and 10C of Income Tax Rules, 1962 in the case of the respondent assessee?

6. Whether under the facts and circumstances of the case and in law, the Tribunal is right in holding that the write-off of loans/advances to the Ghanaian subsidiary constituted expenditure for commercial expediency allowed the deduction u/s 37 of the Act, when the payments were made to vendors of the subsidiary and bore no nexus to the assessee's own business?

7. Whether under the facts and circumstances of the case and in law, the Tribunal is right in holding that the write-off of loans/advances to the Ghanaian subsidiary constituted expenditure for commercial expediency allowed the deduction u/s 37 of the Act, when the amounts were recorded as loans/advances, evidencing financial support rat