TaxTMI 
TaxTMI 
2013 (7) TMI 804
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.... electrification projects on turn key basis. The assessee filed its return of income for the assessment year 2007-08 on 30/10/2007, declaring a total income of Rs. 208,40,81,674/-. The scrutiny assessment was completed u/s 143(3) on 17/12/2009, determining total income at Rs. 211,68,51,117/-. The CIT perused the assessment records and was of the opinion that the order passed by the AO u/s 143(3) is erroneous and prejudicial to the interests of the revenue, hence, the CIT proceeded to pass the order u/s 263 and held that during the year under consideration the assessee company had invested Rs. 2118.84 lakhs in its subsidiaries outside India as below: S.No. Name of the subsidiary Amount invested in Rs. (lakhs) 1 Vijai Electrica....
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....aised the followed grounds of appeal: "1. The order of the learned CIT is erroneous both on facts and in law. 2. The learned CIT erred in holding that the order of assessment passed by the Addl. CIT, Range-3, Hyderabad is erroneous and prejudicial to the interests of the revenue. 3. The learned CIT erred in holding that the transaction of investments made by the appellant are governed by the provisions of sec. 92E of the IT Act. The learned CIT ought to have observed that the transactions mentioned by him are not the international transactions within the meaning of the provisions of sec. 94B and there is no requirement of filing any audit report as required in Form No. 3CEB. 4. The learned CIT erred in ho....
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....international transaction with regard to computation of income as contemplated under Chapter X. The learned counsel submitted that the order u/s 263 is to be set aside as the order of the AO is neither erroneous nor prejudicial to the interests of the revenue. 6. The learned counsel invited our attention to page 86 of the paper book, which is the reply given to the CIT with respect to notice u/s 263 of the IT Act, and the same is extracted below:- "2. Transaction with subsidiaries outside India Rs. 2118.84 lakhs. We bring to your kind notice that the amounts representing Rs. 2118.84 lakhs is towards investment in share capital of the subsidiaries outside India as mentioned in your notice. We bring to your kind ....
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....deemed to be associated enterprises. 55.7. Section 92B provides a broad definition of international transaction, which is to be read with the definition of transaction given in section 92F. An international transaction is essentially a cross border transaction between associated enterprises in any sort of property, whether tangible or intangible, or in the provision of services, lending f money etc., At least one of the parties to the transaction must be a non-resident. The definition also covers a transaction between two non-residents, where for example, one of them has a permanent establishment whose income is taxable in India. 55.8. Sub-section (2) of section 92B extends the scope of the definition of international tran....
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....t otherwise chargeable under the Act." 9. The learned counsel also relied upon the decision in the case of Amiantit International Holding Ltd., 322 ITR 678 (AAR) wherein it was held that in a case where income was not chargeable at all transfer pricing provisions of section 92-B(i) of the IT Act would not apply. 9. The learned DR, on the other hand relied upon the decision ITAT Mumbai Bench "B" in the case of Board of Control for Cricket in India Vs. DIT (Exemption), [2005] 96 ITD 263 (Mum) wherein it was held that 'the said order did not show that the AO had considered or applied his mind to the factual and legal aspects of the case. It was a stereotyped order which simply accepted what the assessee stated in its application with....