| COURT: | ITAT Mumbai |
| CORAM: | R. C. Sharma (AM), Sandeep Gosain (JM) |
| SECTION(S): | 92C |
| GENRE: | Transfer Pricing |
| CATCH WORDS: | associated enterprise, international transactions, Transfer Pricing |
| COUNSEL: | Arvind Sonde, Haresh G. Buch |
| DATE: | August 21, 2018 (Date of pronouncement) |
| DATE: | August 28, 2018 (Date of publication) |
| AY: | 2010-11 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 92 Transfer Pricing: (i) Chapter 10 presupposes the existence of “income” and lays down machinery provision to compute ALP of such income. S. 92 is not an independent charging section to bring in a new head of income or to charge tax on income which is otherwise not chargeable under the Act. If no income has accrued to or received by the assessee u/s 5, no notional income can be brought to tax u/s 92 of the Act (ii) It is a jurisdictional requirement that the AO has to record satisfaction that there is “income” or potential of income. The recording of 'satisfaction' about the existence of an "international transaction" is also essential. This is only within the jurisdiction of the AO and the CIT(A) cannot substitute his satisfaction for that of the AO. Such substitution of satisfaction is impermissible in law as it amounts to curing a jurisdictional defect | |
We are of the view that since chapter 10 pre-supposes the existence of “income” and lays down machinery provison to compute ALP of such income, if it arises from an „International transaction‟. Section 92 is not an independent charging section to bring in a new head of income or to charge tax on income which is otherwise not chargeable under the Act. Accordingly, since no income had accrued to or received by the assessee u/s 5, no notional income can be brought to tax u/s 92 of the Act
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