M/s JCB India Ltd. Vs. DCIT

Parties Involved

Facts Summary

The case involves JCB India Ltd., a wholly owned subsidiary of J. C. Bamford Excavators Ltd. U.K. (JCB UK), engaged in manufacturing earthmoving and construction equipment. The assessee was selected for complete scrutiny under the e-assessment Scheme 2019. The assessment order was passed on 26/02/2022, assessing the income of the assessee at Rs. 11,98,34,09,830/- after making additions of Rs. 1,66,08,87,354/-. The assessee filed objections before the Dispute Resolution Panel (DRP) which were rejected, and the assessment order was confirmed. The assessee preferred the present appeal on various grounds, including errors in the assessment order and the levy of interest.…

Legal Issues

• 1. Whether the AO/DRP/TPO erred in assessing the total income of the Appellant at INR 11,98,34,09,834 against the returned income of INR 10,32,25,22,480 making a TP adjustment of INR 1,66,08,87,354.
• 2. Whether the AO/DRP/TPO ought to have considered the arm's length price of royalty payments for the 3DX model at 4 percent for the AY 2017-18, as agreed between the Competent Authorities of India and the UK under the provisions of Article 27 read with Article 10 of the India-UK DTAA.
• 3. Whether the AO/DRP/TPO have erred in not appreciating the approach followed by the Hon'ble Competent Authorities of two countries (India and the UK) in the Appellant's own case for prior AYs 2009-10 to 2016-17, wherein the arm's length price of royalty payments for the 3DX model was settled under the provisions of Article 27 (Mutual Agreement Procedure or MAP) read with Article 10 of the India-UK DTAA.
• 4. Whether the AO/DRP/TPO have erred in making a transfer pricing adjustment with respect to models other than 3DX ie. 2DX, 4DX, Loadall, Tracked, Excavator, Wheel loader, Mini Excavator (relating to entities based in UK) and Compactor and Skid steer (relating to entities based outside of UK) when the same have been accepted to be arm's length at same rate of royalty consistently.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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