TaxTMI 
TaxTMI 
2019 (2) TMI 722
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....was Rs. 37,39,96,538/-. The Assessing Officer [A.O], referred it under Section 92CA of the Act and the Transfer Pricing Officer [TPO] determined the ALP at Rs. 38,05,97,081/-. The difference was Rs. 66,00,543/-, which was below 5%, ie. the ALP determined exceeded the invoice price only by less than 5%. The provision stood amended by Finance Act, 2009 w.e.f 01.10 2009, by introduction of two provisos. The second proviso permits adoption of the price at which the international transaction was undertaken if the variation between the invoiced price and the ALP does not exceed by a stipulated percentage. At the time of the subject amendment, the percentage was to be notified by the Central Government and by Finance Act, 2011 it was specified as 5% and now at 3%. However the amendment was only prospective and we have to look at the provisions as it existed in the subject assessment year, ie: 2005-06. 3. Section 92B(2) of the Act and the proviso therein as it existed and relevant for the subject assessment year does not provide such a computation or a deeming fiction as now available in the second proviso. It merely provided for a determination of ALP by the appropriate method and the ....
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....n one price determined in so far as the international transaction, on which ALP was determined by the TPO. However, the CBDT Circular has provided a mitigation, which has to be applied with its full force. We in fact had raised a specific query at the last date of hearing as to whether the CBDT could have brought in such mitigation, quite contrary to the provision of law. 6. Reliance was placed on a judgment of the Hon'ble Supreme Court in UCO Bank Vs. Commissioner of Income Tax [(1999) 237 ITR 889. Therein the question arising under the I.T Act was whether the interest accruing in bad and doubtful debts could be taxed as an income. There was a Circular issued in the year 1952 by the CBDT, which provided that interest accrued to a money lender on bad and doubtful debts need not be included in the assessee's taxable income. However, the Kerala High Court expressed a contrary view in the case of State Bank of Travancore v. Commissioner of Income Tax [1977 110 ITR 336] and in such circumstance, the Circular of 1952 was withdrawn by a Circular of 1978. It was clarified that the interest thus credited to doubtful accounts, even if maintained as suspense accounts would be incl....
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....02-2003]. Reference is made to the 2nd paragraph of the Circular to specifically point out that the Circular was in so far as the Rules being framed by the Board, only after the Finance Bill having received assent of the legislature and notified on 21.08.2001. Hence a mitigation was provided, in the case of assessees who had failed to maintain the prescribed information or documents in respect of the international transactions entered into during the period 01.04.2001 to 31.08.2001. The Rules having been brought in only on 21.08.2001, there was no possibility of the assessee being apprised of the requirements prescribed under the provisions; which prescription came long after the commencement of the relevant financial year. True, there was also a mitigation provided insofar as the ALP determined by the tax payer being in variation of 5% of the price for which the transaction was undertaken. However, the same applies only to the proviso that was brought in by Finance Act 2001 with effect from 01.04.2002. The proviso so brought in by Finance Act, 2001 was never enforced since Finance Act, 2002 amended the proviso again with effect from 01.04.2002 itself. Hence, the mitigation provide....
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....001, hence, is not in operation for any period. Circular No.12 of 2001, issued to explain the amendments made by the Amendment Act, 2001 has no effect. We agree with the said finding of the Tribunal and add that the Circular can have effect only insofar as the mitigation provided to an assessee who has not been apprised of the requirements of the maintenance of prescribed information or documents in respect of transactions between 01.04.2001 and 31.08.2001. This is for reason of the Rules being notified in the midst of the year. 13. Computation of ALP as provided under Section 92C can be under any of the methods enumerated under clauses (a) to (f) of sub-section (1), having regard to the nature of transaction or class of transaction or class of associated persons or functions performed by such other persons or such other relevant factors as the Board may prescribe. In the present case, there is only one ALP determined by the TPO in accordance with one of the appropriate methods, being 'comparable uncontrolled price method' as seen from clause (a) of Section 92C(1). The proviso, according to us, would enable an option only in the context of there being a determination of ....