Interest on Fixed Deposits Not Business Income: ITAT upholds 10AA Deduction Denial for SEZ unit

The Income Tax Appellate Tribunal (ITAT) eliminated a transfer pricing adjustment made under Section 92BA of the Income Tax Act in a case where the assessee had not claimed any deduction under Section 80IA. Section 92BA deals with secondary adjustments in transfer pricing, which typically arise when a primary adjustment leads to an actual or deemed repatriation of funds. The tribunal reasoned that since no deduction was claimed under Section 80IA (which provides for deductions to undertakings in special economic zones, etc.), the fundamental conditions for applying a secondary adjustment under Section 92BA were not satisfied. This ruling clarifies the scope and applicability of secondary transfer pricing adjustments, limiting their imposition to situations where a related primary adjustment has a direct impact on taxable income through deductions.