Tuesday 17 January 2012

S. 271AA: Penalty- Transfer pricing- Failure to maintain and keep documents- International

Assessee was engaged in business of manufacturing and distributing non-pharmaceutical health care products
.It had entered in to an International transactions with its associated enterprises (AE). During the course of
assessment proceedings the Assessing Officer observed that as the asssesse failed to maintain books of
accounts for international transaction levied the penalty of Rs 13,57,720.The Tribunal held that the Assessing
Officer did not specify what was the failure on part of assessee under section 92D read with Rule 10D,
secondly in the course of assessment proceedings assess had furnished all details required by Assessing
Officer and International transaction with Associated Enterprise which had been accepted to be one
confirming to arm’s length price by the Assessing Officer. The Tribunal held that the penalty levied by the
Assessing Officer was without any basis hence cancelled the penalty order. (A.Y 2003-04).
Asst CIT v. Smith & Newphew Healthcare (P) Ltd ( 2011) 48 SOT 607 ( Mum. (Trib).

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