MADURA COATS PRIVATE LIMITED Vs. SECRETARY

JUDGEMENT

(1.) Heard Mr.Venkataraman, learned senior counsel, for Mr.Muthu Venkataraman, learned counsel for the petitioner and Ms.Hema Muralikrishnan, learned Senior Standing Counsel for the Revenue.

(2.) The petitioner challenges an order of Dispute Resolution Panel-2 /the first respondent, dated 16.12.2016.

(3.) A return of income was filed by the petitioner in terms of the applicable provisions of the Income Tax Act, 1961 ("?Act"?) for the assessment year (AY) 2012-13. The matter was taken up for scrutiny by the Assessing Officer. Since the petitioner had engaged in international transactions with Associated Enterprises (AE) in the previous year, a reference was made to the Transfer Pricing Officer (TPO)/the second respondent, for a proper determination of the Arm's Length Price (ALP) of transactions. The petitioner followed the Transactional Net Margin Method (TNMM) to arrive at the proper ALP on segmental basis. The TPO issued a show cause notice on 04.01.2016 proposing to reject the methodology adopted by the petitioner for the reason that the segmental profit and loss had not been disclosed as part of the financial statements and were also not certified by an external Chartered Accountant.