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TMI Blog2011 (10) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... APPEAL NO. 774(MDS.) OF 2007 - - - Dated:- 21-10-2011 - HARI OM MARATHA, ABRAHAM P. GEORGE, JJ. For the Appellant: Shri R.B. Naik for the Respondent: Shri S. Hariharan ORDER Abraham P. George, Accountant Member In this appeal filed by the Revenue, grievance raised is that the CIT(Appeals) deleted a penalty of ₹ 1,88,11,365/- levied on the assessee under Section 271AA of Income-tax Act, 1961 (in short the Act ). As per the Revenue, ld. CIT(Appeals) ought have been given an opportunity to the Transfer Pricing Officer (TPO) before deciding the issue in favour of assessee and grossly erred in not calling for a remand report or obtaining comments of the TPO. 2. Short facts apropos are that assessee, engaged in power generation, had international transactions with an associated enterprise called Marubeni Corporation, Tokyo (MC) which was holding 26% of the shares in the assessee. During the course of assessment proceedings, a reference was made under Section 92CA(1) of the Act to the TPO for determination of Arms Length Price with particular reference to transactions reported in Form No.3CEB filed by the assessee for the impugned assessment year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , including the Customs authorities. Further, as per the assessee, based on the documents furnished by the assessee, the TPO had come to a conclusion that no adjustment was required on the value of international transactions entered into by it. Further as per the assessee, the TPO except for making a general comment that documents prescribed under Rule 10D had not been maintained by the assessee, had not pointed out failure of the assessee for maintaining any particular document. Reliance was also placed on OECD guidelines which, inter alia, mentioned that a tax payer could not be expected to obtain and maintain documents beyond the minimum level of requirement that could establish the transfer pricing values. Ld. CIT(Appeals), after considering the arguments of the assessee, was of the opinion that without any specific finding regarding failure of the assessee vis- -vis the documents which were required to be maintained under Rule 10D of the I.T. Rules, Assessing Officer was not justified in levying penalty under Section 271AA of the Act on the assessee. Ld. CIT(Appeals) was also of the opinion that the TPO had not recommended any revision to the value of the international transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rship structure of the assessee enterprise with details of shares or other ownership interest held therein by other enterprises; (b) a profile of the multinational group of which the assessee enterprise is a part along with the name, address, legal status and country of tax residence of each of the enterprises comprised in the group with whom international transactions have been entered into by the assessee, and ownership linkages among them; (c) a broad description of the business of the assessee and the industry in which the assessee operates, and of the business of the associated enterprises with whom the assessee has transacted; (d) the nature and terms (including prices) of international transactions entered into with each associated enterprise, details of property transferred or services provided and the quantum and the value of each such transaction or class of such transaction; (e) a description of the functions performed, risks assumed and assets employed or to be employed by the assessee and by the associated enterprises involved in the international transaction; (f) a record of the economic and market analyses, forecasts, budgets or any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uery Our Response a Description of the ownership structure Please see Annexure 1 b A Profile of the multinational group of which the assessee is a part The assessee is not part of a multinational group c Broad Description of business of the assessee and the industry Please see Annexure 2 d Nature and terms of International transactions Please see Annexure 3 e Description of functions performed, risks assumed and assets employed Please see Annexure 4 f Record of economic and market analysis, forecasts and budgets Please see Annexure 2 g to i Record uncontrolled transactions for analyzing their comparability. Please see Annexure 5. For copy of IDBI Record of analysis performed to evaluate comparability of uncontrolled transactions appraisal memorandum and re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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