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TMI Blog2017 (12) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... India Limited (2016 (12) TMI 1408 - BOMBAY HIGH COURT). This Tribunal is of the considered opinion that under the scheme of the Income-tax Act, the transfer pricing adjustment has to be made only in respect of the transaction of the assessee being a tested party, with Associated Enterprise outside the country after comparing the transaction made by similarly placed company in uncontrolled transaction with non-Associated Enterprise. Therefore, we are unable to uphold the order of the Dispute Resolution Panel Accordingly the order of the DRP is set aside and the entire issue is remitted back to the file of the Assessing Officer. - Decided in favour of assessee for statistical purposes. - ITA No. 357/Mds/2017 - - - Dated:- 16-11-2017 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justment has to be done in order to determine the consideration received in a transaction with Associated Enterprise outside the country. Therefore, according to the Ld. counsel, Chapter X of the Act does not require any adjustment with regard to domestic transaction, hence, the Dispute Resolution Panel is not justified in considering the entire transaction of the assessee including the domestic transaction. Referring to the decision of this Bench of the Tribunal in Caterpillar India Pvt. Ltd. v. ACIT in I.T.A. Nos.204 365/Mds/2012 dated 05.04.2017, the Ld.counsel submitted that this Tribunal found that the entire transaction of the assessee has to be taken into consideration for the purpose of transfer pricing adjustment. In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Delhi High Court in CIT v. Keihin Panalfa Ltd. 92016) 381 ITR 407. The Delhi High Court found that the international transaction constitutes only 23.38%, therefore, the transfer pricing adjustment proportionate to that extent can be made in respect of such international transaction. This judgment of Delhi High Court was followed by Bombay High Court in Alstom Projects India Limited (supra). The Bombay High Court found that Chapter X of the Act is not triggered to make adjustment to considerations received or paid unless they are Specified Domestic Transactions. The transaction with non-Associated Enterprises are presumed to be at arm's length as there is no relationship which is likely to influence the price. In the absence of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and the entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall refer the matter once again to the file of the TPO. The TPO shall reexamine the issue in respect of the international transaction of the assessee with Associated Enterprise outside the country and compare the same with the transaction of similarly placed company with non-Associated Enterprise and thereafter, decide the issue in accordance with law. Similarly, the reversal of royalty also needs to be examined by the TPO and the procedure prescribed under 144C of the Act needs to be followed both by the assessee and the DRP. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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