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2022 (4) TMI 1462 - ITAT MUMBAIRevision u/s 263 - As per CIT AO has not referred International Transactions and Specified Domestic Transactions (SDT) to the transfer-pricing officer for determination of Arms Length Price - HELD THAT:- Case of assessee was not selected on any of the reasons, which are related to transfer pricing adjustment. Merely there are outbound remittances by the assessee to a non-resident does not show that there is a transfer pricing risk involved in the above case. In view of this, we find that according to paragraph number 3.3 the learned assessing officer was not required to refer to the learned transfer-pricing officer for determination of arm’s-length price of the international transaction. Instructions of central board of direct taxes binds assessing officer, according to us the learned assessing officer followed it - CIT did not refer at all the above instructions of CBDT. Further more, it cannot be said that explanation 2 of Section 263 applies because here the learned assessing officer has passed the order in accordance with instructions issued by the board. No evidences are placed/referred in the order of the learned PCIT about any prior transfer pricing adjustment in the case of the assessee or any action of survey search and seizure. The reference of form 3CEB is made in the order of the learned PCIT itself. Therefore, there not exist the circumstances which warrants the learned assessing officer to refer the matter to the learned transfer pricing officer. As decided in case of Secure meters Ltd [2021 (9) TMI 1436 - ITAT JODHPUR] when a case is selected for scrutiny on non-TP risk parameters, it is not mandatory for the learned assessing officer to refer the matter to the learned transfer pricing officer for determination of arm’s-length price of international transactions and specified domestic transactions and therefore the order passed by the learned assessing officer cannot be said to be erroneous so far as prejudicial to the interest of the revenue and hence cannot be subjected to revision u/s 263 of the act by the learned PCIT. Accordingly, on the first ground of non-reference to the learned transfer pricing officer we do not find any infirmity in the order passed by the learned assessing officer by not referring it to the learned transfer pricing officer for determination of arm’s-length price of the international transactions and specified domestic transaction and therefore the order of the learned that AO is not erroneous and hence cannot be subject to revision u/s 263 of the act. Depreciation on goodwill - As in the first year itself wherein depreciation was claimed by assessee in assessment year 2015 – 16, the claim was allowed in scrutiny assessment which is not disturbed by revenue. This is the second year the claim of the depreciation on goodwill. Ld AR has also stated that it is not a self generated goodwill but arising on acquisition of above partnership firm. AR has placed before us the decision of the coordinate bench in case of Bodal chemicals Ltd [2019 (10) TMI 914 - ITAT AHMEDABAD] wherein in paragraph number 10 it has been held that revenue once allowed the deduction for the depreciation claimed by the assessee then it is debarred to reject the claim of the assessee in the subsequent year on the written down value carried forward from the earlier assessment year. Therefore, we fully agree that on this issue the learned principal Commissioner of income tax could not have invoked the provisions of Section 263 of the act. Even otherwise, claim of depreciation on goodwill is a debatable issue on which provisions of Section 263 could not be invoked. Appeal filed by the assessee is allowed.
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