TaxTMI 
TaxTMI 
2020 (1) TMI 44
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....e, an Indian company, is engaged in the business of purchasing rough diamonds, processing of rough diamonds and sale (including export) of rough and polished diamond. Noticing that during the year under consideration the assessee has entered into international transactions with its overseas Associated Enterprises (AEs) the Assessing Officer made a reference to the Transfer Pricing Officer (TPO) to determine the Arm's Length Price (ALP) of such transaction. In the course of proceedings under section 92CA of the Act, the Transfer Pricing Officer called upon the assessee to furnish various information, documents/details to demonstrate that the international transaction entered with AE are at arm's length. In response to the query raised b....
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....nabling him to determine the ALP, the Transfer Pricing Officer initiated proceeding for imposition of penalty under section 271G of the Act and ultimately imposed penalty for an amount of Rs. 16,14,61,108/-. While deciding assessee's appeal challenging the imposition of penalty as aforesaid, learned Commissioner (Appeals) being satisfied with the submissions of the assessee deleted the penalty. 3. Shri Anand Mohan, Learned Departmental Representative, strongly relying upon the reasoning of the Transfer Pricing Officer submitted, onus is entirely on the assessee to prove that the price charged to the related parties is at arm's length. He submitted, though, the assessee applied TNMM as the most appropriate method to benchmark the internatio....
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.... contention, learned Authorised Representative relied upon the following decisions:- i) Dilipkumar V. Lakhi, IT(TP)A no.2142/Mum./ 2017, dated 02.08.2018; ii) Kiran Gems Pvt. Ltd., ITA no.5626/Mum./2016, dated 01.11.2018; iii) CIT v/s D. Navinchandra Exports P. Ltd., ITA no.6304/ Mum./2016, etc. dated. 25.10.2017; iv) DCIT v/s Blue Star Diamonds Pvt. Ltd., ITA no.6553/Mum./ 2017, dated 13.06.2019; v) DCIT v/s Leo Schachter Diamonds India P. Ltd., ITA no. 5931/Mum./2017, dated 28.02.2019; vi) DCIT v/s Laxmi Diamonds Pvt. Ltd., ITA no.2643/Mum./ 2017, dated 27.12.2018; and vii) DCIT v/s Interjewel Pvt. Ltd. & Ors., ITA no.5628/Mum./2016, etc., dated 01.11.2018. 5. We have considered rival submissions and perused the material on....
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....nufacturing and sale of rough and polished diamond to maintain segment wise profitability of sales made to the AE and non-AEs. It was explained by the assessee that CUP method could not be applied as invoice of sale with AE and non-AE include different types of goods sold at different price. It is further observed, in the preceding year also, the assessee had benchmarked international transaction with AE by applying TNMM which was accepted by the Revenue. It is relevant to observe, the TPO has ultimately accepted the benchmarking done by the assessee under TNMM method. On going through the provisions of section 92D and rule 10D, we find that the assessee is required to maintain certain information/documents which may be required by the Tran....