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| The Tax Publishers2020 TaxPub(DT) 1519 (Bang-Trib) INCOME TAX ACT, 1961
Section 92C
Where TPO as well as DRP had not assigned any reason as to why CUP method was not most appropriate method in the nature of transactions assessee had with its AE and also the TPO had not considered the submissions of the assessee for adjustment towards unutilized capacity, the matter was remanded to the AO/TPO for de novo analysis of the TP study.
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Transfer pricing - Computation of ALP - CUP method or TNMM - Revenue failed to consider submissions of assessee---Remand
Assessee-company was a subsidiary of a foreign based company 'K'. It was serving as an execution center for contracts won by the 'K'. It applied CUP method (Internal CUP) to bench mark the international transactions entered with its AE. TPO, however, rejected the CUP method and adopted TNMM method as most appropriate method and accordingly made transfer pricing adjustment. Further, DRP granted relief to the assessee with respect of comparables. Held: It was found that TPO as well as DRP had not assigned any reason as to why CUP method was not most appropriate method in the nature of transactions assessee had with its AE. Further, the TPO had not considered the submissions of the assessee for adjustment towards unutilized capacity. Further, AO also did not follow the directions of the DRP while passing final assessment order. Accordingly, the matter was remanded to the AO/TPO for de novo analysis of the TP study.
REFERRED :
FAVOUR : Matter remanded
A.Y. :
INCOME TAX ACT, 1961
Section 36(1)(vii)
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