INCOME TAX ACT, 1961

Section 260A

Appeal (High Court) - Maintainability - No substantial question of law - Deletion of TP adjustment by Tribunal after recording proper finding of fact not vitiated by any material irregularity or perversity

TPO suggested ALP adjustment on account of supply of gas turbines to AE. During appellate proceedings, ITAT deleted TP adjustment on this count. Revenue challenged this by way of appeal before High Court. Held: Tribunal duly noticed that there was nothing on record to suggest that assessee had provided any services to its AE for sale of its gas based turbines either to PWD or to other customers in India. It was found as a matter of fact that in case of sales made by the AO to other parties in India, assessee was in no way involved in the sales affected. The six parties had stated that they had negotiated directly with AE for purchase of gas turbines and assessee was in no way involved in such transactions. Tribunal also noticed that for earlier assessment years too, there were no transfer pricing adjustments. Thus, there was no basis for concluding that assessee had provided any market support services to the AE or received any commission from the AE for providing such marketing support services. In the absence of concrete evidence, TP adjustment could not have been made merely on presumptions and surmises. Therefore, transfer pricing adjustment was rightly deleted and no substantial question of law arose from the impugned order of Tribunal.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

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