Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (3) TMI 542 - AT - Income TaxTP Adjustment - jurisdiction of AO in making a reference to the Transfer Pricing Officer (TPO) for determining the arm’s length price (ALP) of the international transactions reported by the assessee - Whether Instruction 2016 cannot override section 92C(3) of the Act ? - HELD THAT:- We find that though the amount of the `proposed transfer pricing adjustment’ was more than ₹ 10.00 crore in an earlier assessment year but the same fell short of the `transfer pricing adjustment’ as it was still pending with the DRP at the time of the AO making a reference to the TPO for the year under consideration. Till then, the Assessing Officer had simply forward a draft of the proposed order of assessment to the eligible assessee proposing to make variation in the income returned. To sum up, we find that none of the two conditions enshrined in the Instruction of 2016 were satisfied in as much as neither transfer pricing adjustment of more than ₹ 10 crore was made for an earlier year nor, as a sequitur there was any question of such transfer pricing adjustment having been either upheld by a judicial authority or pending in appeal. That being the position, we hold that the AO made a reference to the TPO in contravention of Instruction No.3/2016. Since the Instruction is binding on the AO, such reference is declared as invalid and the consequential transfer pricing adjustment of ₹ 10.14 crore is directed to be deleted.- Decided in favour of assessee.
|