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2019 (10) TMI 1555 - AT - Income TaxTP Adjustment - payment of development cost - enhancement of its income by ALP adjustment - Whether international transaction pertaining to payment of development cost does not satisfy the arm’s length principle ? - HELD THAT:- It is not in dispute that the assessee has claimed the payment of development cost of Rs.1.98 crores as not an international transaction. It is equally true that the TPO proceeded by treating the same as an international transaction and determined the ALP as nil and enhanced the income of the taxpayer by Rs.1.98 crores. In our considered view once the assessee has challenged the enhancement of its income by ALP adjustment, it was incumbent upon the CIT(A) to decide the appeal on merits of the case. We are of the considered view that CIT(A) ought not have dismissed the appeal. In the interest of justice and fair play we restore the entire issue to the files of the CIT(A). The CIT(A) is directed to decide the appeal afresh - Assessee appeal is treated as allowed for statistical purpose.
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