Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2016 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (8) TMI 1049 - HC - Income TaxTransfer pricing adjustment - discarding the CUP method - Held that:- Section 92-C(1) of the Act pertains to the determination of the arm's length price in relation to “an” international transaction. Section 92-F (ii) defines arm's length price to mean a price, which is applied or proposed to be applied in “a” transaction between persons other than associated enterprises, in uncontrolled conditions. If, for determination of the arm's length price, the assessee had applied more than one of the permissible methods, as recognized under Section 92-C (1), then qua each of the transactions, to determine the arm's length price, the TPO is required to give reasons as to why one of such methods is being preferred over the others. In the case in hand, as observed earlier, for 09 of the 12 international transactions, the order of the TPO is completely silent as to why for determining arm's length price qua them, he has preferred to discard the CUP method, when the same had been applied by the assessee. For the remaining 03 international transactions also, the reasons so given are found by us to be vague and non-specific. In the light of the observations made above, the TPO was required to give reasons for discarding the CUP method qua each of the transactions as all the 12 international transactions entered into by the appellant were distinct. The order of the TPO, having been found to be lacking as above, we find no fault with the order of the Tribunal remitting the matter to the TPO for fresh assessment in accordance with law.
|