Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2019 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 135 - HC - Income TaxTP Adjustment - ALP determination - import price of the transaction with the Associated Enterprises was lower than that with the unconnected enterprises - HELD THAT:- In certain cases the import price of the transaction with the Associated Enterprises was lower than that with the unconnected enterprises. TPO, however, took only those transactions where the import price with the Associated Enterprises was higher. We cannot but observe that there was no warrant for the TPO to interfere with the valuation of the transactions; where the assessee had shown lower valuation for imports from the Associated Enterprises, since those were the admitted price of the assessee itself. In those instances where there was a higher valuation shown in the imports from the Associated Enterprises, the ALP was fixed by the AO finding that there was a difference of more than 5% with the valuation of transactions with unconnected enterprises. As has been contended by the assessee, the very intention of fixation of ALP is to ensure that by mere manipulation of prices i.e. showing higher prices for imports and lower for exports, the actual profit in a transaction shall not be suppressed. Thus resulting in tax being avoided on the income generated in a transaction with an Associated Enterprise; the benefit of which will flow back to the assessee itself. The exercise undertaken by the TPO, according to us, was perfectly in tandem with the intention of the Legislature. There can be no ground taken that there was a pick and choose adopted by the AO. ALP had to be fixed only with respect to those instances of imports, where the valuation was higher when the transaction was with an Associated Enterprise than a similar transaction with unconnected enterprise. - Decided in favour of the Revenue and against the assessee
|