2014 (1) TMI 172

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....aking an addition of Rs. 9,06,95,297/- on account of Arm's Length Price in relation to Purchases made from the Indian Branch Office of its Associated Enterprises, without appreciating that the provisions of Chapter X of the Income Tax Act, 1961 (The Act) are not intended to be applied to such transactions, wherein there is no possibility whatsoever, of shifting of taxable income outside India.      2. The Assessing Officer has erred in law in following the principle of literal interpretation of statute, completely disregarding, the rule of purposive interpretation and making the aforesaid addition of Rs. 9,06,95,297/-, even where such an approach on his part has resulted in an apparent absurdity.    &nbs....

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....gard and accordingly decide the grounds of appeal. 5. Apropos addition of Rs. 9,06,95,297/- on account of adjustment to Arm's Length Price. 5.1 Ld. Departmental Representative submitted that the issue is covered in favour of the Revenue by the decision of the Tribunal in assessee's own case in I.T.A. No. 3991/Del/2010 (A.Y. 2006-07) vide order dated 27.5.2011. 5.2 Ld. Counsel of the assessee submitted that he wanted to make submissions against the above said decision of the Tribunal. 6. We have heard both the counsel and perused the records. 6.1 Upon careful consideration, we are inclined to remit this issue pertaining to transfer pricing to the files of the Assessing Officer. The Assessing Officer shall verify the Tribunal's order in ....

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.... the provisions contained in section 40 of the Act. The provisions contained in Chapter XVII are only for the purpose of ascertaining the deductibility of tax at source and cannot be invoked for the purposes of Section 40. For this, reference was been made to the ITAT, Mumbai's decision in the case of Bapushaeb Nanasaheb Dhumal v. Asstt. CIT [2010] 40 SOT 361 (Mum.). 6.3 Considering the above, the DRP observed that section 40(a)(iii) does not lay down time limit for the payment of tax to the Government account but at the same time it cannot be accepted that a taxpayer can deposit the tax at any time as per his will, howsoever, belated it is. It was further observed that a harmonious construction of section 40(a)(ia) and 40(a)(iii) would su....