Tribunal held that, it is mandatory for the AO to determine the arm’s length price (ALP) of the international transactions by following one of the prescribed methods. He is not entitled to follow any other method or to resort to estimation. The failure to follow one of the prescribed methods makes the entire transfer pricing adjustment unsustainable in law. The legal infirmity cannot be cured by restoring the issue to the TPO. The TPO cannot be allowed another innings to rectify the mistake. (ITA No. 1182/MUM/2017, dt. 16.01.2019) (AY. 2012-13)
CLSA India Private Ltd v. DCIT (Mum.)(Trib.), www.itatonline.org
S. 92C : Transfer pricing-It is mandatory for the AO to determine the arm’s length price (ALP) of the international transactions by following one of the prescribed methods-He is not entitled to follow any other method or to resort to estimation-The failure to follow one of the prescribed methods makes the entire transfer pricing adjustment unsustainable in law-The legal infirmity cannot be cured by restoring the issue to the TPO-The TPO cannot be allowed another innings to rectify the mistake. [S. 254(1)]