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2015 (1) TMI 1008 - AT - Income TaxRevision u/s 263 - TPO did not go into the genuineness of the transaction in AY 2006-07 as assessee did not treat the purchase of technical know-how as international transaction in the audit report u/s 92E of the Act - Held that:- CIT has observed that the TPO in course of proceeding for AY 2006-07 could not have examined the issue as assessee has not reported such transaction in the audit report, but, on examining the facts and materials on record and more particularly the order of the TPO for AY 2006-07, it is very much evident that assessee has produced not only its books of account but its entire financial statements relating to FY 2005-06 was available before the TPO. Therefore, it cannot be said that the transaction relating to purchase of know-how/DMF could not have been considered by TPO. It is also a fact, the AO has completed the assessment after examining the issue and also in terms with TPO’s order for AY 2006-07. Only because the TPO in AY 2007-08 takes a different view, by that reason alone, assessment order cannot be considered to be erroneous and prejudicial to the interests of revenue. Moreover, when the consideration paid by assessee to Matrix has been accepted to be genuine in the assessment conducted in case of Matrix which has been confirmed by DRP, the same transaction cannot be doubted in case of assessee. An assessment order can be considered to be erroneous and prejudicial to the interests of revenue on the basis of facts and materials available on record as on the date of completion of assessment. In the present case, according to ld. CIT himself at the time of completion of assessment, AO did not have the benefit of the TPO’s and DRP’s order for AY 2007-08, which were passed subsequently. That being the case, AO having passed the assessment order on the basis of facts and materials available before him, only because subsequently TPO in AY 2007-08 held the transaction to be not genuine on that basis alone assessment order cannot be held to be erroneous and prejudicial to the interests of revenue. More so, when the TPO in his order for AY 2006-07 has not questioned the genuineness of such transaction. Therefore, on considering the totality of facts and circumstances, we are of the view that as AO has passed the assessment order after examining all the facts and evidences and after proper application of mind relating to the transaction of know-how and DMF, the assessment order cannot be revised u/s 263 of the Act by treating it as erroneous and prejudicial to the interests of revenue. In the aforesaid view of the matter, the assumption of jurisdiction u/s 263 of the Act in the present case is neither proper nor justified.- Decided in favour of assessee.
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