Section 92C(1)

Section 92C(1) — the law in short

What the courts have decided on section 92C(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Barracuda Networks India Pvt Ltd v DCIT ITATHelps taxpayerValidity unconfirmed
  The TPO has taken a three-year weighted average margin for a comparable under Rule 10CA, but the company fails my turnover filter in the two earlier years. Must those years still go into the weighted average?
  No. The Tribunal held that the provisos to Rule 10CA(2) must be read harmoniously with Rule 10B(3) and the proviso to Rule 10B(4), and that where a filter makes an enterprise non-comparable in the earlier two years, the data for those years can have no influence on the determination of transfer prices for the current year and must be ignored. On the facts, if R.S. Software (India) Ltd. was to be a comparable at all, its margins for the two earlier years had to be dropped, because in those years its turnover exceeded Rs 200 crores and it was not comparable.
• ACIT v Dilipkumar V. Lakhi ITATHelps taxpayerValidity unconfirmed
  The TPO wants segment-wise profit and loss accounts for my AE and non-AE business and I cannot produce them. He has levied 2 per cent of the transaction value under s.271G. Can I resist it?
  Yes, where the failure is backed by a reasonable cause, because s.273B applies to s.271G. The Tribunal upheld the deletion of a Rs 56,72,162 penalty on a diamond trader who had furnished entity-level margins but could not split AE from non-AE segments, holding that in a trade where rough and polished diamonds move in mixed lots it is practically impossible to trace which rough stone became which polished stone, and that the assessee had substantially complied to the extent the trade allowed.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.