Richemont India Private Limited Vs DCIT (ITAT Delhi)
When TPO Says Nil, AO can’t add – AO overlooked TPO’s Nil adjustment – Rs.33.95 Cr Reduced to Nil -ITAT Delhi Orders AO to Amend Assessment
Assessee filed appeal against the final assessment order dated 18.06.2024 passed in compliance to DRP directions. It was submitted that pursuant to DRP’s order u/s 144C(5) dated 21.05.2024, the TPO on 18.06.2024 recomputed transfer pricing adjustment at Nil as against Rs.33.95 crore proposed earlier in TPO’s order dated 28.09.2023. However, AO passed final assessment on the same date without considering the TPO’s revised order, thereby ignoring that no adjustment survived.
The contention of the Assessee was that since the TPO’s effect order had already been passed on 18.06.2024, AO was duty bound to take it on record while passing the final assessment. The Departmental Representative stated that it was a factual matter requiring verification.
Tribunal noted that the TPO in his effect order dated 18.06.2024 had indeed computed the transfer pricing adjustment at Nil. Since AO failed to consider this while passing the final assessment order, Tribunal held that the issue requires rectification. It directed AO to consider the TPO’s order, re-compute the income accordingly & amend the final assessment. Tribunal also observed that once no transfer pricing adjustment remains, no grievance survives for the Assessee.
