2019 (12) TMI 1703

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....levied u/s. 271G of the Income Tax Act 1961, (the 'Act'). 2. The grounds of appeal filed by the Revenue read as under : i) Whether the CIT(A) was correct in deleting the penalty levied u/s. 271G of the Act, by holding that the assesses 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 entity level margins which consists of overall profits on AE and significant non-AE transactions. ii) 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 complied with clause (d), (g), (h) and (m) of Rule 10D(1) tha....

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....assessee to submit details and documents mentioned as per Rule 10D(1) and 10D(3) of the Income Tax Rules, 1962 (the Rules). After examining the details and documents filed by the assessee, the TPO asked to submit the segmental profitability of AE transactions and non-AE transactions. The assessee expressed its inability to furnish details in the manner called for by the TPO on the ground that it did not maintain separate books of accounts for AE and non-AE segments. The TPO thus held that he was prevented from benchmarking various transactions and thus levied a penalty of Rs. 2,66,14,800/- u/s. 271G of the Act. 4. Aggrieved by the order of the TPO the assessee filed an appeal before the Ld. CIT(A). We find that the Ld. CIT(A) following t....

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....mar V. Lakhi [IT(TP)A No. 2142/Mum/2017]. 7. We have heard the rival submissions and perused the relevant materials on record. Similar issue arose before the ITAT 'K' Bench, Mumbai in assessee's own case for AY 2011-12 in ITA No. 6304/Mum/2016. The Tribunal vide order dated 25.10.2017 held as under : "20. We further find that as stands gathered from the records, the nature and level of business of the assessee during the year under consideration had increased almost two fold. We find that while for the gross profits of the assessee had also increased from 7.42% for A.Y. 2010-11 to 8.71% for the year under consideration, viz. A.Y. 2011-12, the Net profit had also witnessed a growth from 3.9% in the immediate preceding year to 4.9....