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TMI Blog2016 (3) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... the merits of the TPO’s proposals. Next condition relates to the ‘good faith’. Good faith is not demonstrated before us / lower authorities. In fact, the assessee is silent in the explanations on both the ‘due diligence’ and ‘good faith’ issues. We have perused the explanation furnished by the assessee before the AO and the CIT (A) and find, assessee is casual and his explanation is general in nature. Therefore we are of the opinion, this is the fit case for levy of penalty and therefore, we affirm the decision taken by the lower authorities. - Decided against assessee - I.T.A. No.7214/M/2010 - - - Dated:- 17-2-2016 - GARG, JUDICIAL MEMBER For The Appellant by : Shri Amit Khatiwala For The Respondent : Shri N.K. Chand, CIT-D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions namely (i) Kotelex inj. 30 mg and (ii) Perilium Tab 0.17. After studying the parties analysis and using the above as a CUP for benchmarking the transactions, TPO concluded that the adjustment to the tune of ₹ 2,05,177/- was proposed. The ALP data for Kotolex and Perilium are as under:- S.No. Product Selling rate to AE Comparable rate Sales quantity Price variance Conversion Rate Amount (in Rs.) 1. Ketolex Inj.30 mg 0.43 0.56 30870 0.13 46.583 186930 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Indian Bank are not recognizing and not ready to deal with Ukranian banks favourable. Therefore, GENOM BIOTECH, started exporting through this route since 2001-02 by giving the nominal Mark Up as per International practice. The Country Cyprus is Most Preferred Destination for doing business as it is an attractive international and business centres same as Switzerland and UK. 5. From the above, it is evident that most of the explanation revolves around requirement of the assessee to have AEs at Cyprus, UK and Switzerland and there is no word about assessee s failure in using CUP method involving transaction to transaction benchmarking in its TP studies. It is an undisputed fact that the same product was exported by unrelated parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee before the AO and the CIT (A). He however, agreed to the fact that the addition was agreed upon and to that extent, AO / TPO is justified in selecting CUP as a most appropriate method. Further, he also submitted that the assessee failed to benchmark the transaction to transaction basis instead the assessee benchmarked transaction on aggregate basis. The same is evident from the CPM selected by the assessee. From this point of view, Ld Counsel for the assessee submitted that the addition / adjustment made u/s 92C is justified. However, his arguments revolve around the presence of due diligence and the good faith with which the assessee acted in selecting the CPM as most appropriate method. He relied on the decision of the ITAT, Mum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is based on the due diligence and good faith is failed. Even if assessee has not agreed to the adjustment / addition, considering today s law of the land, the addition of ₹ 2,05,177/- would have been sustainable. Regarding the Tribunal s decision in the case of RBS Equities India Ltd (supra), Ld DR demonstrated that the way the assessee explained and discharged the onus in demonstrating the due diligence and good faith. Coming to the explanation of the assessee on these issues, Ld CIT-DR underlined the absence of written submissions as to how the assessee demonstrated the due diligence and good faith in writing. On all accounts, Ld DR mentioned that the assessee fails and this is a fit case for levy of penalty u/s 271(1)(c) read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Explanation 7 of the Income Tax Act, 1961. The said Explanation 7 reads as follows:- Explanation 7 -Where in the case of an assessee, who has entered into an international transaction defined in section 92B, any amount is added or disallowed in computing the total income under sub-section (4) of section 92C, then, the amount so added or disallowed shall, for the purposes of clause (c) of this subsection, be deemed ot represent the income in respect of which particulars have been concealed or inaccurate particulars have been furnished, unless the assessee proves to the satisfaction of the Assessing Officer or the Commissioner (Appeals) [or the Commissioner] that the price charged or paid in such transactions was computed in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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