9911796707
TMI Blog2022 (9) TMI 1601X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee on account of ALP of specified domestic transactions. Accordingly, we direct the learned Assessing Officer to delete the transfer pricing adjustment. Applicability of section 40A - we are conscious that the provision of Section 40A(2) of the Act, are there on the statute book and this expenditure are required to be tested under that Section with respect to their allowability. In view of this, we set aside the issue back to the file of AO to determine the allowability of this expenditure under Section 40A(2) of the Act. This was also mandate of decision of Texport Overseas Pvt. Ltd [supra]. Even otherwise it is not the case of assessee at all that provision of section 40A (20 does not apply to the assessee. Accordingly, ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mining the Arm's Length Price. 3. On the facts and circumstances of the case and in law, the learned AO, pursuant to the order of the Ld TPO passed on the basis of directions of the Hon'ble DRP, has erred in making an addition of ₹4,00,22,127/- in respect of purchase of goods from the Associate Enterprises (AE). 4. On the facts and circumstances of the case and in law, the learned AO, pursuant to the order of the Ld TPO passed on the basis of directions of the Hon'ble DRP, has erred in making an addition of Rs 75,360/- in respect of office rent paid to the AE. 5. On the facts and circumstances of the case and in law, the learned AO, pursuant to the order of the Ld TPO passed on the basis of directions of the Hon'ble DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransactional Net Margin Method as the most appropriate method and adopting PLI of operating profit to operate revenue selecting fifteen comparables whose margin is at 1.19% and margin of the assessee was determined at 0.04% made an adjustment of ₹4,04,58,834/-. 04. Assessee has paid rent of ₹4,80,000/- to the relative of Directors and further, Directors remuneration of ₹15,24,000/- and payment of professional fees of ₹1,40,000/- was also determined at ₹ nil as assessee could not furnish any information of benchmarking. The total transfer pricing adjustment of ₹4,26,12,834/- was made by order under Section 92CA(3) of the Act dated 1st November, 2019. Consequent to that draft assessment order was passed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities. In this case, the adjustment has been made on account of Arm s Length Price of specified domestic transaction in terms of Section 92BA (i) of the Act. The above clause has been omitted by The Finance Act, 2017 with effect from 1st April, 2017. In such circumstances, the Hon'ble Karnataka High Court in 114 taxmann.com 568 in case of PCIT vs. Taxport Overseas Pvt. Ltd. has categorically held that the resultant effect of the above omission is that it had never been passed and is to be considered as law never been existed. Therefore, respectfully following the decision of Hon'ble Karnataka High Court, we hold that no transfer Pricing adjustment could have been made in the hands of the assessee on account of ALP of specified do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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