75th Founding Day Lecture Meeting on “India@2030” Know More

March 2016

ALP – International transaction – Sections 92CA and 144C – A. Y. 2012-13 – Amount in dispute exceeding Rs. 5 crore – Matter has to be referred to TPO

By K. B. Bhujle Advocate
Reading Time 1 mins
fiogf49gjkf0d
Carrier Race Technologies Pvt. Ltd. vs. ITO; 380 ITR 483 (Mad):

For the A. Y. 2012-13, the assessee had entered into international transactions. The international transactions were certified to be at arm’s length, based on the transactional net margin method as defined. The transfer pricing report and the transfer pricing documentation had been filed. The Assessing Officer computed the arm’s length price on his own and completed the assessment which resulted in an addition of more than Rs. 5 crore.

The Madras High Court allowed the writ petition filed by the assessee and held as under:

“i) Under the CBDT Instruction dated 20/05/2003, once the disputed value crosses a sum of Rs. 5 crore, necessarily the assessing authority has to refer the matter to the Transfer Pricing Officer so as to proceed further.
ii) Since the provisions of the Act make it clear that u/s. 92CA the only option was to place the matter before the Transfer Pricing Officer, and that option had not been followed, the assessment order was not valid and had to be set aside.”

Download PDF

You May Also Like

Business Income – Special Deduction – Proceeds generated from sale of scrap not includable in “Total turnover” for the determining the admissible deduction u/s. 80HHC.

Business expenditure – Section 37 – A. Y. 2003-04 – Year in which allowable – Project abandoned as unviable at capital-work-in-progress stage – No claim made in earlier year – Expenses allowable in the year of write-off