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TMI Blog2019 (3) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... roprietary concern engaged in purchase of raw cashew nuts from abroad and export of processed cashew kernels. This appeal pertains to the assessment year 2003-04. The Assessing Officer (for short "AO") had made an addition of Rs. 23,72,129/- vide Annexure B under Section 92C(4) of the Income Tax Act, 1961 (for short "the Act") as income from international transactions based on the decision of the Transfer Pricing Officer (TPO) under Section 92CA(3) dated 16.03.2006 at Annexure A, wherein Arm's Length Price (ALP) was fixed by the TPO. The appeal before the Commissioner of Income Tax (Appeals), Thiruvananthapuram failed and the assessment of the AO was confirmed vide Annexure C order dated 23.11.2006. The second appeal preferred by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance to the prices at which the appellant had purchased the raw-materials. It is then found that the difference was more than 5%, and therefore, the objection of the assessee regarding fixation of ALP is not sustainable. 6. We heard the learned Senior Counsel, Government of India (Taxes) and the learned Counsel for the appellant. 7. The contention raised by the assessee that there was an embargo in referring the issue to the TPO for reason of the Instructions issued by the CBDT was dealt with elaborately, both by the first appellate authority and the Tribunal. Instruction No.3 of the CBDT dated 20.05.2003 required references to the TPO, if the value of international transaction exceeded Rs. 5 crores. There is, however, no prohibition ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower for exports, the actual profit in a transaction shall not be suppressed. Thus resulting in tax being avoided on the income generated in a transaction with an Associated Enterprise; the benefit of which will flow back to the assessee itself. The exercise undertaken by the TPO, according to us, was perfectly in tandem with the intention of the Legislature. There can be no ground taken that there was a pick and choose adopted by the AO. The ALP had to be fixed only with respect to those instances of imports, where the valuation was higher when the transaction was with an Associated Enterprise than a similar transaction with unconnected enterprise. In the light of the above, the questions of law raised are answered in favour of the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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