2023 (4) TMI 284 - AT - Income Tax

TP Adjustment - Price Penetration Adjustment carried out by the assessee itself in the TP accommodation - challenge to ad-hoc adjustment made by the TPO - TPO had accepted the methods and margin however, treated price penetration adjustment claimed by the assessee as income of the assessee - HELD THAT:- As decided in judicial pronouncements it has been held that any ad-hoc determination of Arms Length Price by the TPO u/s 92 de-hors Section 92C(1) of the Act, hence, will be unsustainable in law. See Sun Pharmaceuticals Industries Ltd [2016 (8) TMI 815 - GUJARAT HIGH COURT], SI Group-India Ltd. [2019 (6) TMI 443 - BOMBAY HIGH COURT], Lever India Exports Limited, Johnson & Johnson Ltd. [2017 (3) TMI 1520 - BOMBAY HIGH COURT]

DR neither disputed the above table submitted by the assessee demonstrating outcome of the bench marking with or without adjustment made by the assessee nor brought any material against the assessee to the notice of the Bench. Thus, it is clear that that margin of the assessee are at “Arm’s Length” without the price penetration adjustment and ad-hoc adjustment made by the TPO on account of price penetration is without jurisdiction of the TPO as held in the above case laws. Assessee appeal allowed.