Case Law Details
Sobha City Vs ACIT (ITAT Bangalore)
No addition for transfer pricing (TP) adjustment related to Specified Domestic Transactions (SDT).
Conclusion: The reference to TPO for transfer pricing adjustment in respect of specified domestic transactions mentioned in clause (i) of section 92BA was not valid, as the said provision had been omitted. Accordingly, AO was directed to delete the addition relating to specified domestic transactions made u/s 92CA however, the matter was restored to the file of the AO with the direction to examine the claim of expenditure in accordance with the provisions of section 40A(2).
Held: Assessee was a partnership firm and was engaged in real estate development business. It had entered into Specified Domestic Transactions during the year. Hence the SDT transactions were referred to TPO, who made Transfer pricing adjustments to the tune of Rs.14.26 crores. DRP also confirmed the adjustment made by TPO and hence, AO completed the assessment by making addition of Rs.14.26 crores towards Transfer pricing adjustment. It was held that the reference to the TPO in respect of specified domestic transactions mentioned in clause (i) of sec.92BA was not valid, as the said provision had been omitted. Accordingly, AO was directed to delete the addition relating to specified domestic transactions made u/s 92CA e Act. However, the matter was restored to the file of the AO with the direction to examine the claim of expenditure in accordance with the provisions of section 40A(2).
FULL TEXT OF THE ORDER OF ITAT BENGALORE
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