2015 (10) TMI 1453 - AT - Income Tax

Reference to TPO u/s 92CA(1) - addition on account of payment for management and technical services availed and payment of technical and consulting services - assessee aggrieved as without informing the assessee about the reason for disregarding the Arm s Length Price and without granting due opportunity of being heard to the assessee while making the reference to TPO - Held that - We find that the necessary details with supporting evidences were filed by the assessee, whereas, the ld. TPO passed the order just in three pages in hurried manner. Without going into much deliberation and keeping in view, the principle of natural justice and to safeguard the interest of both sides, we deem it appropriate to remand this appeal to the file of the ld. Assessing Officer/TPO, with a direction to examine the claim of the assessee afresh, uninfluenced by the observation made in the impugned order and decide afresh in accordance with law by passing a speaking order. Needless to mention here that due/sufficient opportunity of being heard with further liberty to furnish evidence, if any, in support of its claim, be provided to the assessee.- Decided in favour of assessee for statistical purposes only.

Issues:
1. Upholding of the action of the Assessing Officer in making a reference to TPO u/s 92CA(1) without informing the assessee.
2. Challenge against the adjustment made to the total income of the assessee.
3. Consideration of documents/details filed by the assessee.
4. Transfer pricing assessment and addition made by the TPO.
5. Sufficiency of documentary evidence to prove services received from Associated Enterprises.
6. Remand of the appeal to the Assessing Officer/TPO for fresh examination.

Analysis:
1. The first issue revolves around the Assessing Officer's action in making a reference to the Transfer Pricing Officer (TPO) without informing the assessee about the reasons for disregarding the Arm's Length Price. The Tribunal found merit in the assessee's argument that necessary details were filed, contrary to the Assessing Officer's assertion. The Tribunal directed a fresh examination by the Assessing Officer/TPO, emphasizing the principle of natural justice and the need for a speaking order to safeguard both parties' interests.

2. The second issue concerns the challenge against the adjustment made to the total income of the assessee, based on the TPO's order upheld by the Commissioner of Income Tax (Appeals). The Tribunal noted that the necessary details were filed by the assessee, and the TPO's order lacked sufficient deliberation. Consequently, the Tribunal remanded the appeal to the Assessing Officer/TPO for a fresh examination, allowing the assessee the opportunity to furnish additional evidence in support of its claim.

3. The third issue focuses on the consideration of documents and details filed by the assessee. The Tribunal observed that a voluminous paper book was submitted by the assessee from the assessment stage, contradicting the Assessing Officer/TPO's claim that necessary details were not provided. The Tribunal emphasized the importance of considering all evidence and providing a fair opportunity for the assessee to present its case.

4. The fourth issue pertains to the transfer pricing assessment and addition made by the TPO on account of management and technical services availed by the assessee from its Associated Enterprises. The Tribunal highlighted the need for a thorough examination of the claim, free from the influence of previous observations, and directed the Assessing Officer/TPO to decide afresh in accordance with the law.

5. The fifth issue addresses the sufficiency of documentary evidence to prove services received from Associated Enterprises. The Tribunal noted discrepancies in the TPO's observations and the evidence filed by the assessee, leading to the decision to remand the case for a fresh examination to ensure a fair and just determination.

6. The final issue involves the remand of the appeal to the Assessing Officer/TPO for a fresh examination. The Tribunal allowed the appeal for statistical purposes only, emphasizing the importance of providing due opportunity for both parties to present their arguments and evidence.

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