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2021 (5) TMI 747 - AT - Income TaxPenalty u/s 271G - international transactions with its AE of import of rough diamonds which were sold to the third parties - HELD THAT:- The assessee has not maintained segmental accounts of transactions with AE and non AE, however, the TPO has accepted the Arm Length Price of international transactions as submitted by the assessee and also the method of bench marking i.e. TNMM with certain observations that assessee has not maintained the documentation in terms of provisions of section 92D(3) of the Act and therefore he was not in a position to propose any adjustment to Arm Length Price to the international transactions and has to accept the version of the assessee and thus levied a penalty equal to 2% of the value of international transactions with the AE u/s 271G of the Act. The primary argument of the Ld. A.R. is that since the TPO has accepted the bench marking of the assessee under TNMM to be at Arm Length Price, the imposition of penalty under section 271G of the Act for non furnishing of segmental audited statement of AE and non AE was wrong and against the provisions of law. We find merit in the argument of the assessee as the TPO could have gone for its own determination of ALP of the international transactions by following one of the methods prescribed under the Act, however, the TPO has not done so. We find merit in the contentions of the assessee that once the TPO has accepted the bench marking of the assessee to be at Arm Length, the penalty under section 271G of the Act can not be levied. The case of the assessee finds support from the decision of the co-ordinate Bench of the Tribunal in the case of CIT v. Decent Dia Jewels (P.) Ltd. [2020 (3) TMI 603 - ITAT MUMBAI] wherein the Tribunal has held that where the TPO having accepted the bench marking of the assessee under TNMM, the imposition of penalty under section 271G of the Act was to be deleted under similar facts. Appeal of the assessee is allowed.
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