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July 2016

TS-245-ITAT-2016-TP Owens Corning (India) P. Ltd vs. DCIT A.Y.: 2007-08, Dateof order: 22.4.2016

By Geeta Jani
Dhishat B. Mehta
Chartered Accountants
Reading Time 2 mins
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Section115JB of the Act – a self-contained code – No provision under the Act permits A.O. to make adjustment on account of transfer pricing addition to the amount of profit shown by the Taxpayer

Facts
The Taxpayer is a company incorporated in India and engaged in the manufacturing and trading of glass fiber reinforcement products. During the course of assessment proceedings, Transfer pricing officer (TPO) had undertaken certain TP adjustment. A.O. additionally sought to increase the book profits by the amount of the  TP adjustment for the purpose of S.115JB

Held
The TP adjustment made by TPO were deleted by the tribunal. On the additional issue of inclusion of TP adjustment in book profits, Tribunal held as follows:

Section 115JB is a self-contained code. Only those adjustments are permissible to the book profit as have been prescribed u/s 115JB.

The adjustment/additions made under the transfer pricing regulations are governed by altogether different sets of provision as contained in Chapter X of the Act.

Since no provision under the law permits the A.O. to make adjustment on account of transfer pricing addition to the amount of profit shown by the Taxpayer in its profit and loss account for the purpose of computing book profit u/s 115JB, the addition is deleted.

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