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2014 (5) TMI 772 - AT - Income TaxTransfer pricing adjustment Determination of ALP Held that:- The assessing authority issued notice u/s 133(6) to M/s Magnum Interior P. Ltd. on 28-1-2014 - the party did not furnish any detail except balance confirmation, the AO proceeded to add the entire amount as deemed income on account of short receipt declared in P&L A/c - The AO is found to have made an order within a short span of time on 8-2-2014 after it had required M/s Magnum Interior P. Ltd. to furnish information through its notice dated 28- 1-2014 - No reasonable time was allowed to the said vendor to furnish details as sought by the assessing authority nor assessee was required to bring such details on record from the vendors - The AO has not made genuine efforts to obtain the details and reconcile the difference - The addition made appears to be a result of lack opportunity to the assessee thus, the addition is set aside and the matter is remitted back to the AO for procuring requisite details by exercise of his powers under the Act and make reconciliation with the transactions recorded in assessees books of account before making any addition for deficiency. Addition on account of transaction with M/s N Links Held that:- The assessment order does not reveal the mode and manner of sending the notice to the vendor - After the notice stood returned, the AO did not confront the assessee about this fact nor required him to give his address or call for the requisite information and furnish it to the AO for carrying out the directions given by DRP - the assessee could not be expected to have reconciled the difference nor assessing officer can be said to have made bona fide effort to carry out the exercise as directed by the DRP- thus, the addition is set aside and the matter is remitted back to the AO so that requisite inquiries are made and assessee is confronted with the results. The transactions with M/s Thinkpot, the assessee has pointed out that difference in accounts of the vendor with that of assessee is due to the fact that different method of accounting have been adopted by them - The assessee claims to have furnished copies of invoices issued by M/s Thinkpot and has also furnished bank statement for evidencing the payment made to the vendor through a/c payee cheuqes - The AO did not make any reasonable effort or attempt to verify the genuineness and correctness of the transactions before reaching the conclusion of difference in the accounts thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of Assessee. Adjustment of interest on outstanding payment from AE Held that:- There is delay beyond stipulated period in recovery of dues in the international transaction with AE - The assessee did not bring on record any similar uncontrolled transaction to show that no interest has been charged by it for similar delays nor any exact comparability has been established - DRP after considering the legal position, as contemplated under explanation (1)(c) below sec. 92B of the Act Relying upon with reference to material and relevant facts on record, passed reasoned order and having regard to judgment dated 7-10-2010 of ITAT Bangalore Bench in the case of M/s Logix Micro Systems Ltd. Vs. ACIT [2010 (10) TMI 902 - ITAT BANGALORE] there was no infirmity in the directions given by DRP Decided against Assessee.
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