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2019 (8) TMI 1011 - AT - Income TaxNon following the mandate as laid down u/s 144C - TP adjustment - contention of the assessee is that the impugned assessment order should be set aside because the statutorily prescribed procedure was not followed in as much as the AO issued final assessment order in place of draft assessment order followed by issuing notice of demand and also initiating penalty proceedings u/s.271(1)(c) - HELD THAT:- it is found as an admitted position that the AO, on receipt of an order from the TPO, did not pass any draft order u/s 144C(1) of the Act. He directly proceeded to pass an `Assessment order’ u/s. 144C(3) of the Act on 27.12.2011 determining the total income at ₹ 17.82 crore. Not only that, he also issued demand notice on the same date, namely, 27-12-2011 Moreover, in our considered opinion, the real issue is whether the statutorily laid down procedure was followed or not. Any lapse in such a procedure, as is instantly the case, cannot save the final assessment order. The competent authorities of both the countries have resolved the issue concerning international transactions of the assessee with YCJ. A copy of such a Resolution dated 10-09-2015 has been placed on record. It states the amount of total transfer pricing adjustment as per the rectification order dated 21-03-2013 at ₹ 16.43 crore, having transfer pricing adjustment relating to YCJ at ₹ 9,85,89,000/- and the remaining amount of ₹ 6,57,81,925/- on account of transactions with non-YCJ AEs. As per the Resolution, the amount of transfer pricing adjustment corresponding to transactions with YCJ has been reduced to ₹ 5,78,23,800/-, thereby giving relief of ₹ 4.07 crore and odd. Such a Resolution has been admittedly accepted by the assessee. Having accepted the MAP order, the assessee cannot agitate such an issue in the appellate proceedings. In the extant case, the assessee admittedly accepted the Resolution under the MAP. Once the assessee has accepted such a Resolution as per which the amount of transfer pricing adjustment, corresponding to transactions with YCJ, has been restricted to ₹ 5,78,23,800/-, the assessee now cannot resile from such Resolution and is bound by the same. AR fairly admitted that the Resolution has been accepted by the assessee. In that view of the matter, the amount of transfer pricing addition sustained under the MAP proceedings will be considered as a part of total income returned by the assessee, which cannot be assailed in any appellate proceedings. However, all other remaining additions, including the balance of transfer pricing addition in respect of transactions with non-YCJ AEs would stand deleted because of the illegality occurring due to not following the statutorily prescribed procedure u/s 144C of the Act. We, therefore, overturn the impugned order on this legal issue itself but direct to adopt total income at ₹ 5,78,23,800/-, being, the amount of Nil income originally returned as added by the amount of transfer pricing adjustment accepted by the assessee under MAP.
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