Arm's length price reference to the Transfer Pricing Officer is mandatory where the international transaction crosses the prescribed threshold.

Arm's length price determination for an international transaction exceeding the prescribed threshold required reference to the Transfer Pricing Officer. The Tribunal noted that the adjustment had not been so referred despite the transaction value crossing the statutory limit and, following the binding Supreme Court ruling relied on in the order, directed remand. The Assessing Officer was required to refer the matter to the Transfer Pricing Officer for fresh determination of the arm's length price in accordance with law.

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Issues: (i) Whether the arm's length price adjustment in respect of the international transaction, where the transaction value exceeded Rs. 5 crores, was required to be referred to the Transfer Pricing Officer.

Analysis: The matter involved determination of arm's length price of international transactions. The Tribunal found that the adjustment had not been referred to the Transfer Pricing Officer despite the transaction value exceeding the statutory threshold. Following the binding Supreme Court ruling relied upon in the order, the Tribunal held that the issue had to be sent back so that reference could be made to the Transfer Pricing Officer for determination in accordance with law.

Conclusion: The issue was remitted to the Assessing Officer with a direction to refer the matter to the Transfer Pricing Officer for fresh determination of the arm's length price.

Ratio Decidendi: Where the value of an international transaction exceeds the prescribed threshold, the arm's length price must be determined through reference to the Transfer Pricing Officer, and failure to make such reference warrants remand for fresh adjudication.

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