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2013 (7) TMI 249 - AT - Income TaxJurisdiction of Transfer Pricing Officer - whether the Transfer Pricing Officer can suggest adjustments to the Assessing Officer in respect of international transaction which has not been referred to him by the Assessing Officer under section 92CA(1) - Held that:- assessee has entered into international transactions with its associated enterprise - It has followed transactional net margin method for justifying the arm’ s length price of international transactions - Transfer Pricing Officer computed more than normal marketing expenses by comparing the advertisement, marketing and promotion (AMP expenses) as a percentage to sales of the assessee with the average advertisement, marketing and promotion of other companies - in the next assessment year, i.e., 2007-08, the Transfer Pricing Officer has referred the matter to the Assessing Officer regarding these expenses and sought a fresh reference. We are conscious of the fact that every assessment year is an independent assessment year, for abundant caution, if the parties have adopted a different procedure in the subsequent assessment year then that may not be very relevant factor for pointing out defect in the procedure adopted by the Transfer Pricing Officer or the Assessing Officer in the preceding assess ment year - as per section 92CA(1), the Transfer Pricing Officer can suggest adjustment on the international transaction entered into by an assessee with its associate enterprises which were sent to him for computation of the arm’ s length price by the Assessing Officer. Suo motu, he cannot take cognizance of any international transaction for suggesting adjustment in the arm’ s length price - Following decisions of Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. P. Ltd. [2010 (7) TMI 844 - SUPREME COURT], Shamrao V. Parulekar v. District Magistrate, Thana [1952 (5) TMI 12 - SUPREME COURT] and Molar Mal v. Kay Iron Works P. Ltd. [2000 (3) TMI 1040 - SUPREME COURT] - Decided in favour of assessee.
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