TaxTMI 
TaxTMI 
2013 (9) TMI 474
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.... the submissions of the assessee vide order dated 7.11.2005 granted partial relief to the assessee. Aggrieved by the aforesaid order of CIT(A), the Revenue is now in appeal before us and has raised the following two grounds:- (1) The Ld. CIT(A) has erred in law and on facts in directing to restrict the additions made u/s. 14A to Rs. 7,536/- as against Rs. 75,360/-. (2) The Ld. CIT(A) has erred in law and on facts in directing to delete the additions of Rs. 58,48,771/- made u/s. 92CA(3) of the Act. 1st ground is with respect to disallowance u/s. 14A:- 5. On perusing the details filed by the assessee , Assessing Officer noticed that assessee has received total dividend of Rs. 1,21,565/-which was claimed as exempt under section 10(33) of the Act. Assessing Officer was of the view that in the absence of specific evidence provided by the assessee to establish that no administrative and other expenses are attributable to earning of dividend income, proportionate amount needs to be disallowed under section 14A. He thus disallowed the administrative and other expenses in the ratio of divi....
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....hase of Edible Oil. Since the total value of transaction was in excess of 5 crore. The matter was referred to T.P.O. TPO after examining the details filed by the assessee directed for the price differential between that charged to A.E and Malaysian Palm Oil Board (MPOB) price be added to the income of the assessee. Thus the adjustment of Rs. 58,48,771/-was made to the sales of assessee and the income was consequently increased. Aggrieved by the order of Assessing Officer, Assessee carried the matter before CIT(A). CIT(A) after considering the submissions made by the assessee deleted the addition by holding as under:- "4.3. I have considered the submissions of the appellant and facts of the case carefully. The appellant as well as TPO have adopted the CUP method as the most appropriate method to determine the arm's length price. The appellant has maintained necessary statutory records and submitted report prescribed u/s.92E of the I.T. Act. The appellant has mentioned that no adjustment u/s.92C is necessary as the transactions with AE are at Arm length. While determining the ALP the appellant has used two rates/quotations, one from 'MPOB' (Malaysia Palm Oil....
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....he AO/TPO were not justified in making the adjustment to the purchase price and, accordingly, the addition on account of adjustment of the price is hereby deleted. Accordingly, this ground is decided in favour of the appellant". 10. Before us, the learned D.R. filed its written submission which reads as under:- A: Selection of comparables - rejection of World Oil published prices as a comparable. 1. The CIT(A) has wrongly presumed at para 4.3 that the TPO has merely ignored the quotation of 'Oil World'. The CIT(A) has reproduced the documentations which can be relied at page 26 of his order. However, he has erroneously come to a conclusion at page 27 (para 3.4) that the rule does not envisage that "only government publication is to be considered and all other documents relied on by the assessee are to be ignored." * As discussed below, the TPO has duly weighed all the documents submitted by the appellant and has rejected the documents which are not found relevant to the pricing of the product under consideration. * The CIT(A) has also wrongly concluded that all ....
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.... undisputed that the import has taken place from Malaysia. The document submitted by the assessee to the TPO during TP proceedings, is enclosed as annexure A. It is seen that MPOB quotation is based on averaging of quotations in Malaysia. The 'Oil World' quote is also attached with the letter. It is seen that the Oil World quote is based on Lowest Representative Asking Price for nearest forward shipment. It is FOB price of Malaysian crude palm in International Market and not in Malaysia alone. Hence, the location of the person offering the quote is not known. It may be a person outside Malaysia who has already stocked Malaysian crude palm or a person who has sufficient stock of earlier Malaysian crude. The web-site details submitted by the assessee vide its letter dated 9-12-2004 to the TPO is also enclosed at Annexure B. The website does not throw any light on the source of quotations utilized by Oil World while publishing its rates. Since the parameters on which the price quote is based is not clear and without doubt, such quotes are not limited to Malaysian quotes, the price quoted at 'Oil World" cannot be accepted as a valid CUP for purchases being made from Malaysia. In subseq....
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....In view of absence of both the above data. If at all, the CIT(A) could have effected adjustment to the arm's length price based on data supplied by the appellant regarding impact of its long term contracts on the arm's length price. In absence of any such data, the finding is wrong, bad in law and deserves to be quashed. * B: Comparability at transaction level: * The TPO has rightly compared each transaction of purchase with the arm's length price and made additions where the ALP is lower than the consideration paid. The CIT(A) has wrongly commented at para 4.4 (page 28) that the legal position of the TPO is not justified as the average price paid by the appellant is lower than average price on the basis of rates of MPOB. * In the case of UE Trade Corporation (India) (2011) 44 SOT 457 (Delhi) (Decision enclosed at Annexure-C), the Hon'ble Delhi ITAT has discussed the issue and has endorsed the process of comparison of each transaction with the ALP for that transaction where CUP had been adopted as the method for benchmarking (para 3.6 and para 4.2).  ....
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....tical mean of the quotation from MPOB and Oil World. He has further noted that the assessee had entered into contract with A.E on long term basis for continuous supply of constant quality as to ensure continuity in production which was also an important factor for considering the ALP. 12. Before us the Revenue could not controvert the findings of CIT(A) by bringing any contrary material on record. In view of these facts we find no reason to interfere with the order of CIT(A) and this ground of Revenue is dismissed. 13. In the result the appeal of Revenue is dismissed. CO. No. 214/Ahd/2006 14. In the cross objection the assessee has raised the following effective grounds:- 1. On the facts and in the circumstances of the case, the CIT(A) erred in confirming disallowance of Rs.7,536/- as expenditure pertaining to the exempt income. 2. On the facts and in the circumstances of the case, the CIT(A) erred in not accepting the assessee's claim that the prior period expenses of Rs.5,67,308/- were not required to be added back. 15. Ground no. 1 was not pressed and therefore the same is dismissed as not pressed. 16. Ground no. 2 is wit....