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TMI Blog2024 (12) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... o during the previous year relevant to the AY 2011-12. The transaction to purchase an asset is a singular transaction, if the same is an international transaction under Section 92B of the Act, the same may require to be benchmarked for determining the ALP under Section 92C of the Act. This determination is required to be made in the AY relevant to the previous year in which the said transaction was entered into. In view of the above, the order remanding the controversy to the TPO/AO to decide afresh as directed by the learned ITAT cannot be construed as a reference to the TPO in regard to the issue of determining the ALP of the transaction relating to purchase of the trademark FABINDIA. In terms of the order passed by the ITAT, the AO was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction and a reference was made to the TPO. The learned TPO rejected the transfer pricing documentation and analysis submitted by the petitioner and passed an order determining the arm s length price (ALP) of the international transaction as Nil. 3. The assessment was based, inter alia, on the aforesaid basis. Aggrieved by the assessment order, the petitioner preferred an appeal before the learned Commissioner of Income Tax (Appeals) [hereafter CIT(A)] on various grounds. Although the petitioner succeeded before the learned CIT(A) in respect of the same grounds, the petitioner s appeal in respect of the issue of determining the international transaction for purchase of FABINDIA as Nil, was rejected by an order dated 31.01.2013. 4. Aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the OECD guidelines. As far as the objection of the Ld. TPO that whether there is any need for purchase of such intangible or not is concerned, we are of the view that what is to purchase and what not to purchase is not in the domain of the TPO - AO, because it is a business decision of the assessee company and accordingly, when assessee purchased an intangible asset, what is required under the law is to examine whether the price paid by the assessee is arms length price or not. The TPO has no role to play in examining the decision of commercial nature. Under the guise of TPO provisions, the TPO cannot determine the ALP at NIL as held by the Hon'ble Delhi High Court in the case of EKL Appliances Ltd., {supra). Therefore, rejectin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ALP of the asset FABINDIA had been determined at Nil, there was no question of claiming any depreciation in respect of the said asset. 8. The petitioner filed an appeal against the assessment order dated 27.02.2014 in respect of the AY 2011-12 before the CIT(A). However, the petitioner was unsuccessful and the CIT(A) passed an order dated 17.02.2016. 9. Aggrieved by the same, the petitioner preferred an appeal before the learned ITAT (being ITA No.5316/Del/2015 captioned Fabindia Overseas Private Limited v. DCIT, Circle 11(1), New Delhi). 10. The learned ITAT held that the controversy had been decided in favour of the petitioner by the co-ordinate Bench of the learned ITAT in respect of the AY 2007-08 and 2008-09. After noting the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is allowed for statistical purposes. 11. Clearly, the acquisition of the trademark during the financial year 2006-07 could not possibly be treated as an international transaction within the meaning of Section 92B of the Act, which was entered into during the previous year relevant to the AY 2011-12. The transaction to purchase an asset is a singular transaction, if the same is an international transaction under Section 92B of the Act, the same may require to be benchmarked for determining the ALP under Section 92C of the Act. 12. However, this determination is required to be made in the AY relevant to the previous year in which the said transaction was entered into. In view of the above, the order remanding the controversy to the TPO/A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remand of Ld. ITAT, as the proceeding has been initiated and concluded in the case of the assessee by the TPO after due compliance of provisions of the Section 92CA of the Act. Notably, the Ld. ITAT had remanded the issue to the file of the AO/ TPO after taking due cognizance of the fact that no reference was made by the AO to the TPO to determine the arm's length price qua the international transaction entered into by the assessee during the original TP Audit for the A.Y. 2011-12. The reference, thus, made by the AO to the TPO in the remand proceeding is in sync with the direction given by the Ld. ITAT for the A.Y. concerned. Also, due precaution has been taken by the TPO during the TP audit to ensure that the effect of benchmarking tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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