Assessee to ‘keep and maintain’ information and documents in respect of international transaction entered into with AE – ITAT Mumbai

ACIT Vs. Smith & New phew Healthcare (P) Ltd. (ITAT Mumbai)- As rightly held by the CIT(A), the requirement of law is that the Assessee has to “keep and maintain” information and documents in respect of international transaction entered into with AE. Rule 1OD(4) of the Rules envisages that the information and documents specified under sub-rules (1) and (2) should, as far as possible, be contemporaneous and should exist latest by the specified date referred to in clause (iv) of section 92F, which is due date for filing return of income u/s. 139(1) of the Act.

The Assessment order and the order imposing penalty u/s.271AA of the Act, does not specify what was the failure on the part of the Assessee under Sec.92D read with Rule 1OD of the Rules. The Assessee has in the course of assessment proceedings furnished all details required by the AO and the international transaction with the AE has been accepted to be one confirming to the Arm’s Length Price. No addition whatsoever was made by the AO in the order of assessment in respect of the international transaction with AE. Thus the AO has found no difficulty in examining the correctness of the price adopted by the Assessee in respect of International Transaction with the AE. In other words the AO was not handicapped in examining the price of the international transaction between the Assessee with its AE having regard to Arm’s Length Price. In such circumstances,  there is no justification for imposition of penalty.

INCOME TAX APPELLATE TRIBUNAL, MUMBAI

ITA NO. 5779/MUM/07 (A.Y. 2003- 04)

 The ACIT, Range 8(3) Vs. M/s. Smith & New phew Healthcare (P) Ltd.

ORDER

PER N.V. VASUDEVAN, J.M,