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2014 (4) TMI 809 - ITAT MUMBAIJurisdiction u/s 263 of the Act – Determination of ALP – Held that:- The decision in CIT vs. Max India Limited [2007 (11) TMI 12 - Supreme Court of India] followed - where two views are possible and the TPO has taken one possible view the proceedings u/s 263 cannot be invoked - in the case instead of initiating proposal on TPO order, the CIT initiated the proceedings under AO’s order which is not erroneous or prejudicial to the interests of the Revenue, as AO sincerely followed the mandate of provisions of section 92CA in proceeding to compute the total income under sub section 4 of section 92CA in conformity with the arm’s length price so determined by the TPO - the provisions of section 92CA(4) have been amended w.e.f. 1.6.2007 which used the word “shall” AO is bound to follow the TPO’s order determined under sub section 3 (which was itself modified by an order under sub section-5) of 92CA. No issue arises as the CIT wrongly invoked the proceedings u/s 263 on AO’s order when the proposal by the TPO itself is for initiating the proceedings u/s 263 on the TPO order u/s 92CA(3) - Therefore, the order passed by the CIT cannot be justified on the facts of the case - any order of TPO is prejudicial to the interests of Revenue - CIT cannot exercise jurisdiction over TPO as TPO functions separately under the Director of Income Tax (TP) - the DIT should have initiated the proceedings u/s 263 on the order of the TPO instead of sending proposal to the CIT for revising the order of the TPO - the CIT wrongly initiated the proceedings on the assessment order u/s 143(3) which was in conformity with the TPO order u/s 92CA(3) – Decided in favour of Assessee.
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