THE PRINCIPAL COMMISSIONER OF INCOME TAX 4 MUMBAI vs M/S S.G. ASIA HOLDINGS (INDIA) PVT. LTD.

The Supreme Court upheld the Tribunal's decision that the transfer pricing adjustments made by the Assessing Officer under Section 92 of the Income Tax Act, 1961 were invalid as they violated mandatory instructions issued by the Central Board of Direct Taxes (CBDT) in Instruction No.3/2003. The Court emphasized that the Assessing Officer's failure to refer the matter to the Transfer Pricing Officer constituted a breach of the law. Consequently, the appeal was dismissed, affirming the Tribunal's ruling that the adjustments were bad in law.