| The Tax Publishers2020 TaxPub(DT) 4170 (Mad-HC) INCOME TAX ACT, 1961
Section 92C
Where Tribunal in spite of of determining most appropriate method to be applied as regards International Transactions undertaken by assessee with AE, made open remand to AO, Tribunal was directed to decide the issue of appropriateness of method for TP adjustments, while deciding all the pending appeals before it because multiplicity of litigation and rounds of appeal, which could be described as a shuttle game, should have been seen by Tribunal.
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Appeal (Tribunal) - Order of Tribunal - Open remand by Tribunal causing multiplicity of litigation -
Assessee exported goods to its AE abroad and applied TNMM for benchmarking purposes. AO adopted CUP method and accordingly suggested TP adjustment. Matter reached to Tribunal and Tribunal by the impugned order disposed of appeal by following assessee's own case for the assessment year 2009-2010. Assessee's case was that there was no clear finding of Tribunal in the earlier Orders for earlier assessment years. Tribunal only recorded that CUP Method should be adopted for TP adjustment and not TNM Method, looking at the nature of assesse's business. Assessee also undertook before Tribunal that it would supply data relating to other external comparables in the market available, so that appropriate TP adjustments could be made. But, however, misconstruing the same, Tribunal made a remand with specific direction for assessment year 2009-10, that CUP Method was the most appropriate method to be adopted under section 92C for assessee, and thus Tribunal bound down AO to adopt CUP Method and make TP Adjustments accordingly and only for recomputation of TP Adjustments according to CUP Method, the matter had been remitted back to therefore, remand Tribunal for assessment year 2009-10 was only an open remand, leaving it free for TPO to decide once again as to which was the most appropriate method to be adopted in the facts and circumstances of case, for TP Adjustment, whether CUP method or TNM Method and then make T.P. Adjustments, if any.Held: Multiplicity of litigation and rounds of appeal, which could be described as a shuttle game, should have been seen by Tribunal and it was expected of the Tribunal to realize consequences of an open remand made to AO only for re-computation with appropriateness of method decided finally at its own end. Accordingly, Tribunal was directed to decide the issue of appropriateness of method for TP adjustments, while deciding all the pending appeals before it, as far as assessee was concerned and also other assesees by recording its own reasons and taking into acocunt the relevant evidence and materials on record, and if necessary, by calling additional evidence before it, with regard to the external comparables, from both the sides.
REFERRED :
FAVOUR : Matter remanded.
A.Y. : 2011-12
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