The ACIT, Anand Circle, Anand (Appellant) Vs M/s. Chhotabhai Jethabhai Patel & Co., C.J. House, Mota Pore, Nadiad, Kheda-387001 (Respondent)

Parties Involved

Facts Summary

The assessee, M/s. Chhotabhai Jethabhai Patel & Co., is a partnership firm engaged in the business of manufacturing and sale of Bidis. The case was selected for scrutiny, and the Assessing Officer issued a notice under section 143(2) of the Act. The aggregate value of specified domestic transactions was Rs. 120,53,72,948/-. The case was referred to the Additional Commissioner of Income Tax (Transfer Pricing Officer) under section 92CA of the Act, who made upward adjustments to the tune of Rs. 1,62,27,135/-. The assessee filed an appeal before the Commissioner of Income Tax (Appeal) against the order of the Assessing Officer. The appeal was partly allowed by the CIT(A).…

Legal Issues

• 1. Whether the Ld. CIT(A) was justified in deleting the adjustment/addition of Rs. 1,62,27,135/- on account of purchase of Tendu Leaves?
• 2. Whether the Ld. CIT(A) erred in allowing the assessee to take yearly average price of the transactions for comparing the same to comparable transaction in CUP method without appreciating the fact that each transaction is treated and benchmarked separately while applying CUP method?
• 3. Whether the Ld. CIT(A) erred in allowing the assessee to take yearly average price of the transactions for comparing the same to comparable transaction in CUP method which is contrary to the provisions of the Rule 10B of Income Tax Rules?
• 4. Whether the Ld. CIT(A) erred in holding that all the entities are paying taxes at the highest rate and there is no question of tax evasion by ignoring the fact that the transfer pricing is concerned with the determination of Arm's Length Price of the specified domestic transactions carried out by the assessee?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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