2012 (8) TMI 1169 - AT - Income Tax

Summary

Issues involved: Appeal against order u/s 143(3) read with section 144C of the Income Tax Act, 1961; Rejection of objections by DRP-II; Addition on account of difference in arm's length price of international transactions.

Summary:

Issue 1: Assessment u/s 143(3) and 144C
The appeal was filed against the order of the ITO Ward 13(4), New Delhi u/s 143(3) read with section 144C of the Income Tax Act, 1961. The DRP-II rejected the objections raised by the assessee and directed the Assessing Officer to proceed with the assessment as proposed in the Draft Assessment Order.

Issue 2: Addition on Arm's Length Price
The Assessing Officer proposed an assessment at an income different from the one returned by the appellant, based on the arm's length price of international transactions. The appeal contested the addition made on account of the difference in the arm's length price, as determined by the TPO under section 92CA(3) of the Act.

Facts:
The Draft Order u/s 144C of the Act was passed, and objections were filed by the assessee before DRP-II against proposed additions. The objections were rejected, leading to finalization of assessment by the Assessing Officer based on the Arm's Length Price margin. The assessee contended that additional evidence application was not duly considered by the tax authorities.

Judicial Precedents:
The assessee relied on a judgment of the Hon'ble Jurisdictional High Court of Delhi, emphasizing the Tribunal's discretion to allow additional evidence for proper adjudication. Another judgment of ITAT, Delhi A Bench was cited, highlighting the importance of considering additional evidence for determining the arm's length price of international transactions.

Decision:
The Tribunal found that the tax authorities passed orders without considering the additional evidence application submitted by the assessee. In light of the judgments cited, the Tribunal directed the matter to be restored to the file of DRP-II for considering the additional evidence and deciding the case afresh. The appeal of the assessee was allowed for statistical purposes.