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Assessee has raised the ground that the learned Dispute Resolution Panel (DRP) erred on facts and in law in enhancing the adjustments/disallowances suggested by Transfer Pricing Officer(TPO) in the Remand Report without giving a show cause notice to the appellant to the said effect. Hence, the principles of natural justice have been violated.

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Sec. 92C & 144C of Income Tax Act, 1961 - Transfer pricing - Neither the ALP adjustments can be equated with disallowances of expenses, even though effect may be same, nor the TPO has the authority to disallow the expenses. Clearly, the impugned ALP adjustments are vitiated in law for this short reason alone. In any case, the observations with respect to the lack of evidence in support of the benefits is based on sweeping generalizations and is incapable of sustaining legal scrutiny. - HAMON COOLING SYSTEMS PVT LTD V/s DEPUTY CIT - [2020] 185 ITD 023 (ITAT-MUMBAI)