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TMI Blog2017 (12) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... eal. First is against the addition of Rs. 33,11,21,660/- made by the Assessing Officer on account of transfer pricing adjustment in AMP expenses. 3. Briefly stated, the facts of the case as recorded in the assessment order are that the assessee is engaged in the manufacturing and trading of soft contact lenses, eyecare solution and protein removing enzyme tablets. The assessee is also involved in the trading of surgical equipments, such as, Excimer Laser System and Cataract Machines and Intra Ocular lenses. The assessee reported certain international transactions in Form No.3CEB. The Assessing Officer made a reference to the Transfer Pricing Officer (TPO) for determining the arm's length price (ALP) of these transactions. The TPO proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as against the 'manufacturing and distribution' activities done for earlier years. This contention does not appear to be correct. It is apparent from the first page of the TPO's order wherein he has recorded that: 'the assessee is engaged in manufacturing and trading of soft contact lenses..........'. Similarly, the AO in the impugned order has also recorded in para 2 that the assessee is : 'engaged in the business of manufacturing lense care solutions and trading of contact lenses and ophthalmic intra ocular lenses and surgical equipments.' It is, therefore, palpable that the nature of activity carried out by the assessee during the instant year is similar to that done in the earlier years, being that of manufacturing and trading as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had no power to ask the TPO to carry out benchmarking analysis of the international transaction of intra-group analysis, once the TPO did not propose any transfer pricing adjustment on this count in his original order. It was submitted that if, at all, there was some infirmity in the order of the TPO or the draft order, the remedy lied only with the CIT to revise such order u/s 263. This was opposed by the ld. DR. 9. After hearing both the sides, it is found as an admitted position that the TPO or the AO in the draft order did not propose any transfer pricing adjustment or addition on account of intra group services. It was done at the instance of the DRP. Now the question is whether the DRP is empowered to adopt this course of action. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. When we consider the language of sub-section (8) in conjunction with the Explanation, it clearly emerges that the DRP has a power to enhance variations proposed in the draft order on an international transaction, even if it was not raised by the assessee. 'Enhance the variations' include not only increasing the amount of transfer pricing adjustment already proposed, but also making a new transfer pricing adjustment, which was omitted to be proposed/made by the AO/TPO. There is no doubt and cannot be that the power of the DRP is co-terminus with that of the AO/TPO. In other words, the DRP can also do all such things, which the authorities could have done but omitted to do. If the language of the provision is read as disabling the DRP to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect matter of revision is an order of the AO and that too, if it is prejudicial to the interest of the revenue. An order can be prejudicial to the interest of the revenue only when it crystallizes the liability of the assessee to pay and notice of demand is issued, which in the opinion of the authority is prejudicial to the interest of the revenue. If no final liability, pursuant to which a demand notice can be issued, is capable of determination at that stage, such a draft order ceases to be characterized as an 'order' capable of revision u/s 263. A draft order precedes the order. Only when a draft order is either not objected to by the assessee or is approved by the DRP, that the final order is passed determining the liability of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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