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2019 (12) TMI 1533 - AT - Income TaxTP Adjustment - prescribed method as prescribed under section 92C - determining the arm length price of the international transactions without following any of the prescribed method as prescribed under section 92C - HELD THAT:- As in respect of advance given to AE which has been written off by the assessee, the TPO has taken the ALP of the international transaction of writing off of the bridge fee as nil and an equal adjustment has been proposed to be made in the aggregate value of international transactions reported by the assessee. Similarly, in respect of service fees for purchase of franchise, the ALP of the international transaction has been taken at nil and equal adjustment is proposed. In both these transactions, we observe that no prescribed method has been followed by the TPO as envisaged by the provisions of section 92C of the Act. The Ld. DRP has also upheld the order of TPO while allowing some relief on the additions proposed. In our view the TPO is duty bound to propose additions/adjustments in ALP after following any of the methods as prescribed in section 92C of the Act. See M/S. JOHNSON & JOHNSON LTD. [2017 (3) TMI 1520 - BOMBAY HIGH COURT] and M/S. KODAK INDIA PVT. LTD. [2016 (7) TMI 677 - BOMBAY HIGH COURT] In both the decisions, the Hon’ble Bombay High Court has held that it is obligatory on the TPO to follow one of the method as mandated by provisions of section 92C of the Act and therefore we are inclined to set aside the order of DRP/TPO and direct the AO to delete the additions. - Decided in favour of assessee.
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