HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NOs.532 AND 563 OF 2014 DATED:6.11.2014 Between:
Commissioner of Income Tax-III IT Towers, AC Guards Hyderabad … Appellant And M/s. Alumeco India Extrusion Limited [Formerly known as M/s.Pennar Profiles Limited] Registered Office at Kallakal Village Toorpan Mandal, Medak District … Respondents THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NOs.532 and 563 of 2014 COMMON JUDGMENT: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) These two appeals are sought to be preferred against the common judgment and order of the learned Tribunal dt.31.5.2013 in relation to the assessment years 2006- 2007 and 2007-2008 on the following substantial question of law:
“In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in directing the Assessing Officer/Transfer Pricing Officer to compute the value of international transaction by using Internal Cost Plus Method under Section 92CA of the Act instead of External Transaction Net Margin Method?”
We have heard Mr. B. Narasimha Sarma, learned counsel for the appellant, and perused the judgment and order under appeal.
It appears that the learned Tribunal has recorded the fact that when the assessee has chosen a Most Appropriate Method and substantiated the choice in its Transfer Pricing study it is upto the Transfer Pricing Officer to record and substantiate the reasons as to why the assessee’s Most Appropriate Method was incorrect and why some other Transfer Pricing Method need to be the Most Appropriate Method. The Tribunal did not find any substance in any of the Transfer Pricing Officer’s multiple arguments for rejection of assessee’s internal Cost Plus Method and adoption of external Transaction Net Margin Method. In other words, it was found by the Tribunal that the decision of the Transfer Pricing Officer was absolutely arbitrary and irrational and hence it set aside the order of the Transfer Pricing Officer. We do not find any element of law for consideration in these appeals.
The appeals are therefore dismissed. There will be no order as to costs.
K.J. SENGUPTA, CJ SANJAY KUMAR, J 6.11.2014 bnr