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| The Tax Publishers2020 TaxPub(DT) 0463 (Del-Trib) : (2020) 204 TTJ 0912 INCOME TAX ACT, 1961
Section 92CA
When AO noticed that value of international transaction exceeded R.s 5 crores, pursuant to the Instruction No. 3/2003, dt. 20-5-2003, matter should have been referred to TPO for determination ALP of concerned international transaction, and for not doing so adjustment on account of ALP could not be sustained.
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Transfer pricing - Determination of ALP - No reference made to TPO in spite of knowing the fact of value of international transaction exceeding Rs. 5 crores -
Assessee-company entered into international transaction with AE to the tune of Rs. 7 crores as submitted in report under section 92E in Form No. 3CEB. AO took the view that assessee-company could not show that there was in fact receipt of services, the payment commensurated with benefit and such payments benefited the assessee directly and tangibly. Accordingly, AO determined ALP of the international transaction at nil and added Rs. 7 crores to the income of assessee.Held: AO failed to specify as to how payments made by assessee were not commensurate with services obtained by assessee. Also, when AO noticed that value of international transaction exceeded Rs. 5 crores, pursuant to the Instruction No. 3/2003, dt. 20-5-2003, matter should have been referred to TPO for determination of ALP of concerned international transaction, and for not doing so adjustment on account of ALP could not be sustained.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
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