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2020 (12) TMI 1051 - AT - Income TaxTP Adjustment - determination of Arms Length Price by TPO - MAM selection - TPO while bench marking proceed bench marked the transaction by using CUP as most appropriate method - assessee selected TNMM as most appropriate method to benchmark the international transaction - HELD THAT:- There is no dispute that Tribunal in assessee’s own case for A.Y. 2012-13, which was followed in A.Y. 2011-12 held that the ad-hoc determination of Arms Length Price by TPO de-hors section 92C(1) would not be sustainable. No tax can be levied without the authority of law as mandated by Article 265 of the Constitution of India. Similarly, the exchequer should not be deprived from its legitimate tax due. In our view, the assessee would not be prejudiced in setting-aside proceeding, if they have merit in their favour. Considering the aforesaid factual and legal discussion and the facts that the TPO has not followed the mandate of section 92C in determining ALP, therefore, we deem it appropriate to restore the issue to the file of AO/TPO for determination of ALP of International Transaction by the method prescribed under section 92C(1) read with Rule 10AB and 10B of Income Tax Rules, 1962. Needless to order that before passing the order, the AO/TPO shall provide due opportunity of hearing to the assessee. The assessee is also directed to substantiate its contention by explaining all the facts and provide necessary information and evidences to the AO/TPO. The AO/TPO is further directed to pass the order as early as possible and within six month of receipt of this order. In the result, the grounds of appeal related with the T.P. Adjustment in all years (AYs 2013-14, 2014-15 & 2015-16) are restored back to the file of AO/TPO and are treated as allowed for statistical purpose. Disallowance of MAT credit entitlement - HELD THAT:- We direct the AO to allow MAT credit to the assessee on the basis of order for AY 2013-14 in accordance with law. Needless to order that before passing the order, the AO/TPO shall provide due opportunity of hearing to the assessee. Calculation of tax and interest - HELD THAT:- Considering the fact that substantial addition, which was based on the adjustment on account of T.P. issue has been restored to the file of AO/TPO, the AO is directed to verify the fact and calculate the tax and interest in accordance with law.
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