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2021 (10) TMI 361 - HC - Income TaxReopening of assessment u/s 147 - whether the revenue is justified in reopening the assessment for the year under consideration? - determining the Arm’s Length Price of the international transactions entered into by the assessee with its associated enterprises - HELD THAT:- The assessee Company had entered into various international transactions with its associated enterprises. Any income arising from international transaction shall be computed having regard to the Arm’s Length Price. The original Form No.3CEB under Section 92E of the Act determining the Arm’s Length Price of the international transactions entered into by the assessee with its associated enterprises had been submitted physically as well as online with the respondent within the time prescribed by the Act and thereafter, return of income for the year A.Y. 2013-14 was filed and the same was processed under Section 143(1) of the Act and the case was selected for scrutiny assessment under Section 143(2) - also not in dispute that, during the course of proceedings, the AO had called for necessary information by issuing notice under Section 92C read with Section 142(1) of the Act dated 05.02.2016 for the A.Y. 2013-14 and the same was complied with by the assessee vide its letter dated 19.02.2016, whereby, the assessee had furnished a copy of the audit report in Form No.3CEB containing the complete details of international transactions and also submitted Transfer pricing Study report and thereafter, on 18.03.2016, the revised Transfer Pricing Study report and Accountant’s report were submitted and finally, the AO has framed the assessment vide its order dated 18.03.2016. Before completion of the scrutiny assessment, the original Accountant’s report in Form No.3CEB, Transfer Pricing Study report and revised reports thereof were available on record and it is evident that, the assessee had submitted it in a prescribed time limit. Thus, all the information with regard to international transactions entered into by the assessee with its associated enterprises were placed on record at the time of scrutiny assessment proceedings. On perusal of the reasons recorded, it appears that the AO has recorded to the effect that he could not refer the matter to the Transfer Pricing Officer nor could he examine the issue because of delayed submission of the revised reports - observations recorded by the AO are factually incorrect and contrary to the material evidence on record - while framing the assessment order, it would not reflect that due to non-submission of revised Accountant’s report or Form No.3CEB, AO could not determine the Arm’s Length Price or refer the issue to the Transfer Pricing Officer. Thus, we find substance in the contention raised by the learned counsel for the writ applicant that, the reasons recorded are factually incorrect and without any basis - Decided in favour of assessee.
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