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2019 (2) TMI 722 - HC - Income TaxTPA - Application of the proviso to Section 92C(2) - ALP determination - option available to an assessee in the fixation of the arms length price [ALP for brevity] under Chapter X - benefit of relief granted circular dated 23.8.2001 - provisions amended vide Finance Act, 2002 w.e.f. 1.4.2002 - Held that:- In the present case, there is only one ALP determined by the TPO in accordance with one of the appropriate methods, being 'comparable uncontrolled price method' as seen from clause (a) of Section 92C(1). The proviso, according to us, would enable an option only in the context of there being a determination of more than one price by the most appropriate method. In that context it does not offer an option to compare the ALP determined with reference to the invoiced price, being the price at which the transaction is undertaken. When there are more than one price determined then the average has to be taken and the assessee has an option to adopt one of the prices determined by the A.O or the TPO; which does not vary by an amount in excess of 5% from the arithmetical mean and not from the invoiced price. There is absolutely no reference to the invoiced price insofar as the option made available to the assessee by the proviso as it existed from 01.04.2002, introduced by Finance Act, 2002 relevant to the subject assessment year. Subsequently sub-section (2A) was was brought into Section 92C by Finance Act, 2012, and contention of the assessee that the amendments in 2009 are clarificatory in nature rejected. Hence, the statute, for the relevant year, did not at all provide an acceptance of the invoiced price on any count and not at all on the ground that the difference between the invoiced price and the ALP determined not exceeding 5%. The mitigation provided by the CBDT is on the proviso introduced by the Finance Act, 2001. The same cannot be applied to the proviso introduced by way of substitution, by the Finance Act, 2002. The substituted proviso, which applied from 01.04.2002 erased the earlier proviso from the statute totally. It granted an option to the assessee; but only insofar as adopting one of the prices from which the average price is determined; that too in cases of more than one price being determined under the most appropriate method. In such circumstances, we answer the question of law framed in favour of the Revenue and against the assessee.
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