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2016 (3) TMI 824 - AT - Income TaxPenalty u/s 271(1)(c) - assessee not adopting for CUP method and not benchmarking each of the transaction separately - Held that:- Failures of the assessee include (i) not adopting for CUP method and (ii) not benchmarking each of the transaction separately. AO actually benchmarked all transactions in aggregation while applying the CPM. Assessee is well aware about the availability of CUPs atleast for the two international transactions. In that sense, we find due diligence is not in existence in not using the CUP method and not benchmarking the transaction with the TP study. As such, assessee agreed to the above benchmark study of the TPO considering the merits of the TPO’s proposals. Next condition relates to the ‘good faith’. Good faith is not demonstrated before us / lower authorities. In fact, the assessee is silent in the explanations on both the ‘due diligence’ and ‘good faith’ issues. We have perused the explanation furnished by the assessee before the AO and the CIT (A) and find, assessee is casual and his explanation is general in nature. Therefore we are of the opinion, this is the fit case for levy of penalty and therefore, we affirm the decision taken by the lower authorities. - Decided against assessee
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