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| The Tax Publishers2020 TaxPub(DT) 2331 (Mum-Trib) : (2020) 208 TTJ 0725 INCOME TAX ACT, 1961
Section 144C
Neither ALP adjustments proposed by TPO could be equated with disallowances of expenses, even though effect might be same, nor TPO had authority to disallow expenses, therefore, DRP was not justified to propose higher adjustment as against lower amount proposed by TPO.
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Assessment - Transfer pricing - Dispute Resolution Panel - DRP suggested higher adjustment treating adjustment proposed
Assessee entered into transactions with its AE abroad. TPO proposed ALP adjustment. DRP proposed higher adjustment as against lower amount proposed by TPO. Assessee's case was that DRP treated adjustment proposed by TPO as disallowance. Held: ALP adjustment had been made by TPO and DRP 'enhanced' the same. In DRP order, it had been stated that 'TPO had suggested that adjustment/disallowance is justified'. That, however, was factually incorrect and legally unsustainable in law. Neither ALP adjustments proposed by TPO could be equated with disallowances of expenses, even though effect might be same, nor TPO had authority to disallow expenses. Clearly, adjustments proposed by DRP was vitiated for this reason alone.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2007-08
INCOME TAX APPELLATE TRIBUNAL RULES, 1963
Rule 34(5)(c)
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