2014 (7) TMI 1387 - HC - Income Tax

Appeal Dismissed: Tribunal Ruling Upheld, Transfer Pricing Officer Can't Declare Transactions as Shams.

The HC of Telangana and Andhra Pradesh dismissed the appeal challenging the Tribunal's ruling, affirming that the Transfer Pricing Officer lacks the ... Power of the TPO to determine ALP transaction as sham - HELD THAT:- By the impugned judgment and order of the learned Tribunal[2014 (2) TMI 673 - ITAT HYDERABAD] which is sought to be appealed against, the Tribunal held, following the ratio of the decision in the case of L.G. Polymers India (P) Ltd. v. A.C.I.T. [2011 (9) TMI 259 - ITAT VISAKHAPATNAM]Transfer Pricing Officer is not empowered to hold the transaction as sham transaction. Reading the provision of law, the aforesaid conclusion in our view is not erroneous. We, therefore, dismiss the appeal. The High Court of Telangana and the State of Andhra Pradesh dismissed the appeal against the Tribunal's judgment, which stated that the Transfer Pricing Officer cannot declare a transaction as a sham transaction. The decision followed the precedent set in the case of L.G. Polymers India (P) Ltd. v. A.C.I.T. (2012).