INCOME TAX ACT, 1961

Section 92C

Transfer pricing - Determination of ALP - 'Specified domestic transaction' claimed to be below Rs. 5 crores, however, reported in Form 3CEB that too, in a wrong column - Ulterior motive

AO made a reference to TPO for determination of the ALP of 'specified domestic transaction' on the basis of the report by the assessee in Form No. 3CEB which stated the value of SDT as per books of accounts at Rs. 7.07 crore, whereas TPO determined ALP of 'international transaction.' Assessee contended that it was, in fact, a mistake on the part of assessee in reporting wrong values in Column Nos. 8 and 9 of Form No. 3CEB in as much as correct value of international transaction was Rs. 7.07 crore and that of SDT was Rs. 2.60 crore. Held: Since stated value of SDT was more than Rs. 5 crore, it was obligatory on the part of AO to make reference to TPO for determining its ALP. It was on the basis of report furnished by assessee itself that AO first sought approval from PCIT and then made a reference to TPO for determining ALP of the reported SDT with value of Rs. 7.07 crore. Once assessee misreported the figures of SDT and international transaction, it could not be allowed to turn around later and seek benefit of its own mistake by contending that proceedings be set aside as violative of section 92CA. The case of the assessee was founded on the premise that correct value of the SDT to be reported in Column no. 9 of Form No. 3CEB was Rs. 2,60,04,296, which was wrongly reported in Column no. 8 and vice versa. Any raison d'etre was beyond understanding for assessee in reporting, at all, the correct value of transactions of the nature prescribed in section 92BA in the first instance, when it did not cross threshold of Rs. 5.00 crore, so as to become SDT. The fact that such transactions did not become SDT and required no reporting in Form No. 3CEB coupled with the fact that assessee still reported it and that too, in a wrong column, gave some strength to the view point canvassed by AO that assessee desired to mislead Revenue by resorting to the tactic with ulterior motive. Accordingly, There was no infirmity in TPO's action in determining the ALP of 'international transaction' of Rs. 7.07 crore.

REFERRED :

FAVOUR : Against the assessee

A.Y. :

INCOME TAX ACT, 1961

Section 92C

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