2014 (5) TMI 1239 - HC - Income Tax

TP Adjustment - transaction in question, facially, does confirm to the description of an international transaction or not? - petitioner argues that the AO acquires the jurisdiction to refer the computation of arm s length price to the TPO only upon his formation of opinion, based upon existence of material, that a transaction amounts to an international transaction, and not otherwise. HELD THAT - The transaction in the present case involves investment into M/s Bharti AXA Life Insurance Co. Ltd. The petitioner, First American Securities holds certain shares in the said M/s Bharti AXA Life Insurance Co. Ltd. An end eavour was made to suggest that the nature of the transaction, specially the nature of share holding, is facially so small that there cannot be any reasonable opinion that AXA India Holdings, Mauritius is an associated enterprises or that the transaction of it subscribing to equity shares was an international transaction. As revenue opposes the claim and submits that given the wording of Section 92CA of the Act, if the Assessing Officer on coming across any transaction which may amount to an international transaction, is of the view that it is 'necessary or expedient to do so' he can with the previous approval of the Commissioner refer the computation of arm s length price of an international transaction to the Transfer Pricing Officer. Having regard to the submissions, this Court is of the opinion that it would not be expedient at this stage to intervene under Article 226 of the Constitution of India.

Summary

The High Court dismissed the writ petition challenging a notice issued by the Transfer Pricing Officer under the Income Tax Act, 1961. The petitioner argued that the transaction did not qualify as an international transaction. The court held that it would not intervene at this stage and dismissed the petition.