DCIT, CHENNAI vs. INDIAN ADDITIVES LIMITED, CHENNAI

Ms. Jamuna, the Ld. Departmental Representative submitted that the assessee has not maintained the transfer pricing documentation as required U/s. 10B of the Act. Therefore, the Ld.AO levied penalty U/s.271AA of the Act. Since, the assessee failed to maintain documentation as required U/s.10B, the Ld.CIT(Appeals) is not justified in deleting the penalty levied by the Ld.AO.

On the contrary, Shri M. Viswanathan, the Ld. representative for the assessee submitted that the assessee engaged in the business of manufacture of lubricating oil. The Transfer Pricing Officer (TPO) has not made any adjustment after going through the material evidence filed by the assessee. Since no adjustment was made in the transfer pricing matter, the Ld.CIT(Appeals) by placing reliance on the order of this Tribunal in the assessee’s own case for the assessment year 2006-07 deleted the penalty levied U/s.271AA of the Act.

We have considered the rival submissions on either side and perused the material available on record. It is not in dispute that the TPO has not made any adjustment in the transfer pricing proceedings. This Tribunal in the assessee’s own case for the assessment year 2006-07 found that since no adjustment was made with regard to international transactions, there cannot be any levy of penalty U/s.271AA of the Act. Since the Ld.CIT(Appeals) has placed reliance on the order of this Tribunal, this Tribunal do not find any reason to interfere with the order of the lower authority. Accordingly the same is confirmed.

In the result, the appeal of the Revenue stands dismissed.