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2009 (8) TMI 821 - AT - Income TaxProvisions of section 40A(2) of the Income-tax Act, 1961 ('the Act') would override the special provisions contained in Chapter X of the Act - Held that:- provisions of section 40A(2) would not and cannot override the provisions contained in Chapter X of the Act. Even otherwise, if there are different provisions over the same subject then in law the specific provisions would prevail. So, even assuming that provisions of section 40A are attracted, these are the general provisions applicable to all transactions while the provisions of Chapter X are specific provisions relating to international transactions only. Disallowance which was made in complete disregard of the order of the 'Transfer Pricing Officer' ('TPO') issued under section 92CA(3) of the Act wherein the royalty paid has been held to be at arm's length- Held that:- royalty payment having been accepted by the TPO as arms' length payment, there was no justification on the part of the learned CIT(A) to hold that the same was unreasonable and the AO was justified in making the disallowance out of the same by invoking the provisions of Section 40A(2)(b), assessee's appeal allowed. Provisions of section 92CA(4) of the Act - Assessing Officer is required to compute the total income of the assessee having regard to the arm's length price determined by the TPO - Held that:- TPO has accepted the price determined by the Assessing Officer and therefore, the Assessing Officer is required to compute the total income of the assessee in regard to the arm's length price determined by the TPO.
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