AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (12) TMI 227
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....stralia and AB Minerals BV (Netherlands). In Form 3CEB which was signed by the Chartered Accountant, there was a certification of having examined records of the Petitioner relating to international transactions entered into during the previous year ending on 31 March 2008. The particulars required to be furnished under Section 92E were furnished in the annexures to the Form. Among the international transactions that were disclosed, the Petitioner stated that it had an international transaction under which, in pursuance of its business plans, the Petitioner had acquired Novelis Inc. through its wholly owned subsidiary AB Minerals (Netherlands) BV. It was stated that in discharging its responsibility to arrange funds for this acquisition, the Petitioner had provided a corporate guarantee to a bank which had provided the Netherlands based subsidiary of the Petitioner with funds necessary for acquisition. 3. On 25 September 2009, the Assessing Officer addressed a letter to the Commissioner of Income-tax-VI, Mumbai seeking approval for a reference under Section 92CA(1) to the Transfer Pricing Officer for computation of the Arms Length Price in relation to 17 Assessees of which the Peti....
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....on of Novelis was done with the express purpose of strengthening Hindalco's global position as an integrated aluminium producer with the presence in the entire value chain. This acquisition positioned Hindalco as a globally integrated aluminium producer with low-cost alumina and aluminium production facilities combined with a high-end aluminium rolled product capabilities. Therefore, looking at the objective and intent behind this acquisition, it is clear that the acquisition was intended to increase the global reach of the growth under the flagship parent company i.e. Hindalco. In the present case, the provision of Corporate Guarantee by Hindalco to international banks was in substance only to serve the limited purpose of arranging funds for overseas business expansion for Hindalco itself through the SPV. Further, in discharging its responsibility to arrange funds for this acquisition, Hindalco has provided a corporate guarantee to the international banks who have in turn provided funds to BVCo. Thus in the opinion of the company, and having regard to the economic and commercial factors, it would be inappropriate for Hindalco to charge a fee from BVCo for providing such a guarant....
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....he Transfer Pricing Officer on 14 October 2011 and 21 October 2011. The Transfer Pricing Officer made a determination of the Arm's Length Price by his order dated 31 October 2011. 6. The Petitioner in these proceedings now seeks to question the validity of the approval granted by the Commissioner of Income-tax to the Assessing Officer, the reference made by the Assessing Officer to the Transfer Pricing Officer on 9 October 2009 and of the order dated 31 October 2011 passed by the Transfer Pricing Officer. 7. Counsel appearing on behalf of the Petitioner submitted that (i) Section 92CA empowers the Assessing Officer to make a reference to the Transfer Pricing Officer where the Assessee has entered into an international transaction in any previous year and the Assessing Officer considers it necessary to do so with the previous approval of the Commissioner for computation of the Arm's Length Price in relation to the international transaction. The submission is that before a reference can be made, the Assessing Officer must consider it necessary or expedient to do so and the Commissioner has to grant his approval. It has been urged that the reference was made on the basis of an instr....
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....tion under Section 92CA(3), the Assessing Officer is required to compute the income of the Assessee under Section 92C(4) in conformity with the Arm's Length Price determined by the Transfer Pricing Officer. Before the Assessing Officer does so, he is duty bound under Section 144C(1) to forward a draft of the proposed order of assessment to the Assessee, if he proposes to make any variation in the income on last return that is prejudicial to the Assessee. Thereupon, the Assessee has a remedy before the Dispute Resolution Panel. Even thereafter, the Assessee has available to it the remedy of an appeal under Section 253(1)(d) upon an order passed by the Assessing Officer under Section 143(3) or Section 147 in pursuance of the directions of the Dispute Resolution Panel; (iii) The reference in the present case was made by the Assessing Officer to the Transfer Pricing Officer on 9 October 2009, pursuant to the approval granted on 13 September 2009. The Assessee participated before the Transfer Pricing Officer and was duly represented. The Petition under Article 226 of the Constitution has been filed on 15 December 2011. Having received the initial notice from the Transfer Pricing Officer....
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.... relation to the international transaction under Section 92C to the Transfer Pricing Officer. Upon a reference being made to him, the Transfer Pricing Officer is required to serve upon the Assessee a notice requiring the Assessee to produce any evidence on which the Assessee may rely upon in support of the computation made by him of the Arm's Length Price in relation to the international transaction. After considering the evidence which the Assessee may produce and after taking into account all relevant materials which he has gathered, the Transfer Pricing Officer can determine the Arm's Length Price in accordance with sub-Section (3) of Section 92C. The proviso to sub-Section (3) requires the Assessing Officer to furnish a notice calling upon the Assessee to show cause why the Arm's Length Price should not be determined on the basis of material, information or documents in the possession of the Assessing Officer. Once a determination is made by the Transfer Pricing Officer, the Assessing Officer under Section 92CA(4) has to compute the total income of the Assessee in conformity with the Arm's Length Price as determined by the Transfer Pricing Officer. Section 144C mandates that th....
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....of the reference made by the Assessing Officer to the Transfer Pricing Officer on 9 October 2009 and the underlying approval of the Commissioner dated 30 September 2009, both of which have been issued over two years ago. The Petitioner, in any case had notice before the Transfer Pricing Officer as far back as on 3 March 2010 and participated in those proceedings. Under the statutory provisions, to which a reference is made earlier, a comprehensive remedy is available to the Petitioner before the Assessing Officer frames an order of Assessment. A draft order has to be prepared to which the Petitioner is entitled to submit its objections. Even against the draft order, the Petitioner has a remedy of moving the Dispute Resolution Panel. Though the Assessing Officer is bound by the determination of the Arm's Length Price by the Transfer Pricing Officer, it is evident from the statutory scheme that the Appellate Tribunal before which remedy of an Appeal is available would be entitled to consider every aspect of the matter when it renders its decision in the exercise of its appellate powers. 12. In this view of the matter, we are not inclined to exercise the writ jurisdiction under Artic....