The Delhi bench of the Income Tax Appellate Tribunal (ITAT) comprising of Shri Pradip Kumar Kedia, AM & Shri Yogesh Kumar us, JM has held that reference to TPO is valid only for SDT exceeds the threshold limit of 5 crore u/s 92BA.
The appellant contended that CIT(A) has ignored the fact that the assessee company has an SDT of Rs. 4,94,91,268/- as such the same were not required for referring to the TPO per provisions of section 92BA and further contended that the CIT (A) has ignored the fact that the TPO in the order passed u/s 92BA(3) of the I.T. Act, 1961 has held the details of domestic transactions of Rs. 4,94,91,268/- that was also below Rs. 5 crores as such those were not to be referred to the TPO. As per the order dated passed by the Transfer Pricing Officer under Section 92CA (3) of the Act whereby the details of domestic transactions undertaken by the assessee with its Associate Enterprises (AE) were admittedly worked out at Rs.4,94,91,268/-.
The Revenue on the other hand resisted the challenge to the bar of limitation for passing assessment order and relied upon the order of the lower authorities.
‘Specified Domestic Transactions’ (SDT) defined under Section 92BA of the Act stated that the aggregate of such transaction entered into by the assessee must exceed a sum of Rs.5 crore at the relevant time in order to fall within the SDT defined under Section 92BA of the Act. It was observed that the assessee is not entitled to an extension of the time limit provided under Section 153(4) of the Act by an extended period of another year which is applicable only where the reference to the TPO has been validly made within the framework of the law.
The Tribunal held that the order of TPO under Section 92CA (3) was null and quashed the order. The appeal of the assessee is allowed whereas the appeal of the Revenue is dismissed. Shri Ashwani Kumar appeared on behalf of the assesee and Shri Mithun Shete appeared on behalf of the revenue.
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