Sec. 92C of Income Tax Act, 1961— Transfer pricing—Adjustment made by TPO restricted in respect to the allotment of shares for the period of 80 days only

Facts: The Ground of the appeal raised by assessee before Tribunal relates to confirmation of the upward transfer pricing adjustment of Rs. 17,21,746 in respect of the assessee’s International Transactional of Share Capital subscription into its A, Astral Pipes Ltd. by recharacterizing a share subscription transaction as a transaction of advancing of loan and holding the appellant’s international transaction is not at arms’ length by the Revenue. The alternative claim of the assessee to restrict the transfer pricing adjustment to Rs. 3,53,108 has also not been taken into consideration by the learned CIT(A) by not adhering to the RBI Master Circular No. No. 15/2014-15 dt. 1st July, 2014 180 days to allot equity shares/preference shares from the date of receipt has also been challenged before Tribunal.

Held, that taking into consideration the entire aspect of the matter, the ratio laid down by the Hon’ble Bombay High Court on the question of TPO’s jurisdiction in questioning the commercial expediency of the assessee or suggesting this transaction ‘sham’ and also the fact of charging interest on the period of delay in view of the Master Circular No. 15/2014-15 dt. 1st July, 2014, we are of he considered opinion of restrict the adjustment in respect to the allotment of shares for the period of 80 days only. Accordingly interest is charged @2 per cent for 80 days; the total addition is, therefore, to the tune of Rs. 3,53,108. The learned AO is directed to give effect to this order. - ASTRAL POLY TECHNIK PVT. LTD. V/s DEPUTY CIT - [2020] 26 ITCD Online 092 (ITAT-AHMEDABAD)