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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 ..... r 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 well. In the absence of any difference in the factual position prevailing in the year under appeal vis-à-vis the earlier year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nafter also called the Act ) in relation to the assessment year 2012-13. 2. Only two issues are raised in this appeal. First is against the addition of ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and circumstances of the instant year are different inasmuch as the assessee did only distribution activity in the year under consideration 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. AR contended at the outset that the DRP overstepped its jurisdiction in directing the AO to make such an addition. It was stated that the DRP 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all include the power to consider any matter arising out of the assessment proceedings relating to the draft order, notwithstanding that such matter was not raised by the assessee. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard etc., revise the order. What is the subject 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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