TMI Blog2022 (2) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... he ALP methodology adopted by the assessee. He has not made use of the details submitted by the assessee, which were lot wise details of exported cut and polished diamonds - HELD THAT:- As requisite detail asked during the Assessment Year 2011-12 were not required for earlier years and no adjustment was made. Therefore, the details asked for by the learned Transfer Pricing Officer may be relevant for determination of Arm s Length price. But was asked for the first time, not question by ld TPO in past TP Assessments, therefore, assessee has a belief that such information is not required as well as not available, therefore , the assessee has reasonable cause under section 273B of the Act for not maintaining the same. For failure as envisage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, the profit of the international transaction has to be furnished, whereas the assessee has only furnished the entity level margins which consists of overall profits on AE and significant non-AE transactions. 2. Whether the decision of the CIT(A) is not vitiated for the reason that the CIT(A) has not given any finding on how the assessee has complied with clause (d), (g), (h) and (m) of Rule 10D(1), that have been specifically invoked by the TPO. 3. Whether the CIT(A) was not incorrect in stating that the TPO should have asked for copies of profit and loss accounts and balance sheets of AE's to make an overall comparison with the gross profitability levels of the assessee with AE's to ascertain diversion of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee filed return of income and filed form No. 3CEB. The reference was made to the Transfer Pricing Officer to determine the arms length price of those international transactions. The learned Transfer Pricing Officer asked assessee to furnish the details and documents in respect of Transactional Net Margin Method (TNMM) to workout profitability of associate enterprises and non-associated enterprises. The assessee expressed his inability to submit the same in view of the practical difficulties between bifurcating the stock price and cost. Therefore, the LD Transfer Pricing Officer held that assessee has not maintained the relevant documentation under Rule 10D (1) of The Income-Tax Rules, 1962 (hereinafter referred to as 'Rules ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al transaction entered into by the assessee, in view of this he submitted that penalty has been correctly deleted by the learned Commissioner of income-tax (Appeals). 08. The learned Authorised Representative further stated that if the order of the learned CIT (A) is upheld, the cross objection of the assessee become infructuous. 09. We have carefully considered the rival contentions and perused the orders of the lower authorities. Admittedly, the assessee at the time of filing of it return of income has filed form No. 3CEB, saying international transactions. The assessee has a total turnover of ₹342 crores, out of which export is ₹291 crores. The sale to the associate enterprises are ₹9.44 crores. The total purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction which can be set off with profit of non Associated Enterprises transactions. This detail was not filed and therefore, penalty notice under section 271G was issued. The Transfer Pricing Officer was of the view that assessee has failed to maintain the information as per Rule 10D (1) (d), (g), (h) and (m) of Income Tax Rules. In reply to the show cause notice, assessee submitted that transfer pricing provisions do not apply to the assessee there are no entities controlled by the assessee and therefore there is no international transaction in absence of any AE. It submitted that the firm in Belgium which is showing transaction as associated enterprises in fact is non associated enterprise and therefore, transfer pricing provision do no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails and documents made available to arrive at a fair and reasonable opinion regarding ALP of the international transactions. It was further held that the profit and loss account and the annual accounts of the Associated Enterprises would have revealed the gross profit margin earned by them for comparisons. The learned CIT (A) further held that on the identical facts and circumstances for Assessment Year 2011-12, the benchmarking of the assessee was accepted on identical facts. Therefore, the requisite detail asked during the Assessment Year 2011-12 were not required for earlier years and no adjustment was made. Therefore, the details asked for by the learned Transfer Pricing Officer may be relevant for determination of Arm s Length price ..... X X X X Extracts X X X X X X X X Extracts X X X X
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