Case Law Details
Sec. 92CA(1) envisages that where the assessing officer considers it ‘necessary or expedient’ to do so, he may with the approval of the Commissioner refer the computation of the arm’s length price in relation to the concerned international transaction to the TPO. In my opinion, the said section does not contemplate that the assessing officer has to first come to a definite finding that there is an international transaction within the meaning of Sec. 92B before he can exercise his power to refer the matter to the TPO. So long as he is of a prima facie view that an international transaction is involved and it is necessary or expedient to refer the computation of the arm’s length price in relation thereto to the TPO, he will be well within his powers to do so.
AO can refer a case to TPO if he is of a prima facie view that an international transaction is involved
Relevant Extract from the Judgment
(38) Although arguments have been advanced at length on behalf of the parties, the issue involved in the present proceeding is a short one, i.e. whether the reference made by the respondent no. 3 to the TPO under Sec. 92CA(1) of the IT Act in respect of the petitioner companies is without jurisdiction or otherwise incompetent so as to warrant judicial intervention.
(39) The sum and substance of the argument made by learned Senior Counsel for the petitioners is that the reference is without jurisdiction because: (i) a reference under Sec. 92CA can be made to the TPO only if there is an international transaction; (ii) for this purpose an ‘international transaction’ means a transaction between two or more associated enterprises; (iii) PWH and Services BV are not associated enterprises. Hence, PWH and Services BV are not involved in any international transaction for the purpose of Sec. 92CA(1) of the Act.
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