TANTIA JOINT VENTURE,KOLKATA vs. DCIT, CIRCLE-51, KOLKATA, KOLKATA

The ld.AR submits that the Pr.CIT having exercised his jurisdiction u/s. 263 of the Act held ‘ the assessment order passed u/s. 143(3) of the Act dt. 29-12-2015 is erroneous and prejudicial to the interest of the revenue and directed the AO to conduct enquiry in respect of amounts paid to two related parties as per section 92C(1) of the Act. The ld. AR placed on record an order dt. 24-10-2017 passed by the TPO U/Sec. 92 CA(3) of the Act and referred to para-3 of the said order and argued that it has no grievance against the impugned order passed by the Pr. CIT U/Sec. 263 of the Act in view of the finding of TPO (Transfer Pricing Officer) that no transfer pricing adjustment is warranted in the case of assessee.

On the other hand, the ld. DR relied on the order of the Pr.CIT.

Heard rival submissions and perused material. We find that the ‘Pr. CIT opined that the assessee has only submitted a joint venture agreement dt. 01-03-2001 & 04.05.2001 with M/s. Techni Bharati Ltd & M/s. Tantia Construction Ltd in the assessment proceedings u/s. 143(3) of the Act in which percentage of share of payment is only mentioned, but no basis for determination of such percentage has been given to show that such payment was commensurate with the services provided by the parties and also work done by them for the assessee by presenting data of similar payments being made to some unrelated parties for same kind of services and execution of work as done by these two parties i.e M/s. Tantia Construction Ltd & M/s. Techno Bharati Ltd. Therefore, the AO was required to obtain such data and make necessary examination to ascertain the most appropriate method to be applied in case of the present assessee for determination of ALP in relation to the transaction by the assessee with the said two parties. Since no such enquiry or collection of data for further examination has been done by the AO, the CIT directed the AO to refer the matter to the TPO for determination of ALP in respect of the transitions with the above mentioned two parties. It is observed from the order dt. 24-10-2017 passed by the TPO that the notice u/s. 92CA(2) dt. 1-3-2017 was issued to assessee. In response to which, the AR of the assessee appeared before the TPO and submitted requisitioned documents and information. On examining the same, the TPO, held that no transfer pricing adjustment is warranted in the Specified Domestic Transactions entered into by the assessee. We find from the order dt. 24-10-2017 of TPO, which is placed on record by the ld.AR, wherein it is clear that the objections raised by the CIT u/s. 263 were answered. Therefore, the grounds raised by the assessee in the appeal have become infructuous and hence, dismissed.

In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 14-02-2018