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Whether, on the facts and in the circumstances of this case, it was appropriate for the TPO to reject the CPM to determine the ALP of the transactions with AEs, on the ground that the transactional net margin method (TNMM) to determine the ALP will be more appropriate on the facts of this case.

Shanti Prime Publication Pvt. Ltd.

Sec. 92C of Income Tax Act, 1961 & Rule 10B(2) & 10C(2) of Income Tax Rules, 1962 - Transfer pricing - The assessee appellant challenged correctness of the order of AO under s. 143(3) r/w s. 144C(13) of the IT Act, 1961, for the asst. yr. 2009-10, saying that the AO erred in passing a conformity order accepting adjustment made by the TPO and DRP erred in confirming the action of the TPO of arriving ALP by using TNMM Method and rejecting the CPM Method used by the appellant-company for the purpose of determining ALP, erred in confirming the order of the TPO and rejecting Non AE Comparables selected by the appellant, erred in confirming the order of the learned TPO which followed 'pick and choose' out of the companies selected for TNMM and erred in Confirming the adjustments made by TPO. ITAT while allowing the appeal held that ”The AO thus has only one month from the end of the month in which the DRP directions are received to complete the assessment 'in conformity with the directions' of the DRP. However, it would appear that by not giving effect to the directions of the DRP on the ground that relevant inputs are not received from the TPO and proceeding to pass the assessment order as originally proposed, the AO ends up extending this statutory time limit. That does not seem to be a course permissible in law. An order passed under s. 143(3) r/w s. 144C(13), which is not in conformity with the directions of the DRP as in this case, may not perhaps meet any judicial approval“. - MOTT MACDONALD (P) LTD. V/s DEPUTY CIT - [2020] 206 TTJ 030 (ITAT-MUMBAI)