2022 (5) TMI 1279

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.... CIT(A) was correct in deleting the penalty levied u/s 271G by holding that the assessee had made substantial compliance, failing to note that under TNMM adopted by the assessee, the profit of the international transaction has to be furnished, whereas the assessee has only furnished the entire level margins which consists of overall profits on AE and significant non-AE transactions. 2. Whether the decision of the CIT(A) is not vitiated for the reason that the CIT(A) has not given any finding on how the assessee has compiled with clause (D),(g),(h) and (m) of Rule 10D(1), that have been specifically invoked by the TPO. 3. Whether the CIT(A) was not incorrect in stating that the TPO should have asked for copies of profit and....

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.... Assessing Officer made reference to the Transfer Pricing Officer (for short 'TPO') to determine the arms length price for the following international transactions:- S.No. Nature of the international transactions Amount in (Rs.) 1. Purchase of rough diamonds 254,07,36,605 2. Sales of rough diamonds 39,05,59,371 3. Sale of Polished diamonds 109,70,42,045   Total 402,83,38,021 The TPO had sought for details and documents from the Assessee as per rule 10D1) and 10D(3) of the I.T. Rules, 1962 and upon furnishing the said details, the Assessee was called for specific details of the segmental profitability for AE and non AE transactions. The Assessee had failed to furnish the segmental profitab....

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....f the Assessee, we proceed to hear the Ld.DR after perusing the materials available on record. The Ld.DR argued that the Assessee being a diamond merchant ought to have maintained the books of account for each and every transaction and that the order of Assessing Officer levying penalty has to be sustained. 7. Having heard the Ld.DR and perused the materials on record, we are of the view that though there are various grounds of appeal, the only substantial issue that has to be decided is whether the CIT(A) was justified in deleting the penalty levied under section 271G, the other grounds being ancillary to this. From the facts of the case, it is evident that the Assessee has furnished the necessary details for determination of the arm's ....