Ingram Micro: TPO's PE Finding Falls Outside a Section 92CA Reference

A Section 92CA reference is meant to test the arm's length price of a specifically identified international transaction. The Assessing Officer's reference defines that scope, and a TPO cannot expand it.

In Ingram Micro (India) Exports Pte. Ltd. v. DCIT, the AO referred the matter to the TPO based on search statements that the Indian affiliate was "carrying on the actual business" of the Singapore entity, a general assertion rather than an identified transaction. The TPO went further, holding that the assessee had a Permanent Establishment in India and raising an adjustment of about Rs. 61.32 crore, feeding a proposed assessment of roughly Rs. 72.39 crore.

The Mumbai ITAT set aside the order. It held that a TPO's jurisdiction under Section 92CA is confined to the arm's length price of a specifically identified transaction. PE existence under Article 5 and taxability of profits under Article 7 remain matters for the AO, not the TPO.

Practitioners reviewing TPO orders built on broadly worded references should examine whether the reference itself identifies an actual transaction before accepting findings made on the strength of it.