Case Law Details
Court: The Mumbai Income Tax Appellate Tribunal
Citation: ACIT Vs. Firmenich Aromatics (India) Pvt. Ltd. [ITA No. 4654/Mum/2009] dated 17 May, 2010
Background
The Mumbai Income Tax Appellate Tribunal (“the Tribunal”) has discussed the principles in relation to application of penalty provisions, under section 271(1)(c) of the Income-tax Act, 1961 (“the Act”), in case of a transfer pricing adjustment involving ACIT v. Firmenich Aromatics (India) Pvt. Ltd. [ITA No. 4654/Mum/2009] dated 17 May, 2010
Specifically, the Tribunal held that where there is a difference between the Revenue and the assessee in selecting and applying a transfer pricing method for the purpose of determining the arm’s length transfer price, such difference constitutes a bona fide difference of opinion and does not tantamount to furnishing of inaccurate particulars of income by the assessee with the intent of concealing income. In doing so, the Tribunal also placed reliance on the Supreme Court judgment in the case of CIT v. Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC). As a result, the Tribunal ruled in favour of the assessee and held that there was no case for penalty proceedings under section 271(1)(c) of the Act to be initiated against the Taxpayer.
Please become a Premium member. If you are already a Premium member, login here to access the full content.