2015 (10) TMI 385

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....grounds 2 to 8 are on filters applied for selection of comparables. In its ground no. 1, grievance of the assessee is that revised segmental results given by it was not considered by the AO and the TPO. 2. Ground number one is taken up for disposal first. 3. Facts apropos are that the assessee engaged in the business of Design & Development of animation and manufacture of packaging units had filed its return declaring an income of Rs. 1,26,76,520/-. The AO referred the international transactions entered during the relevant previous year to the TPO for determining the Arms Length Price (ALP). Assessee had two segments of operations. One was Information Technology Enabled Services (ITES) segment and the other was packaging unit segment.....

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....s. The TPO arrived at arm's length mean margin on cost considering the 8 comparables. While arriving at the 8 comparables he applied certain filters and excluded some of those comparables taken by the assessee. Arms length mean margin of 25.04% on cost was worked out by the TPO, and an upward adjustment of Rs. 1,00,04,375/- was recommended. 4.1 AO issued a draft assessment order (DAO), on the lines proposed by the TPO. Assessee preferred to take up the matter before the DRP. Assessee mentioned before the DRP that it had filed a rectification letter pointing out the revised margin work-out furnished by it, which was not considered by the TPO. As per the assessee, such rectification petition was not disposed off. Further, as per the as....

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....has reported on 18- 12-2013: '"the rectification petition filed by the assessee on 06-02-2013 has already been rejected vide order dated 30-08 2013" Further, " .......... TPO rejects the revised financials filed by the tax payer. ..... " The TPO, vide letter dated 18-12-2013, has reported no change in adjustment of Rs. 1,04,05,375/- made u/s 92CA as per TPO's earlier order dated 18-02-2013. Hence the same is adopted as addition towards the returned income in account of adjustment u/s 92CA".' 7. Now before us, learned AR submitted that the assessee pursuant to the directions of the DRP, had submitted before the TPO on 19-12-2013 a letter in which it had given the details of the reallocation of cost in the revised segm....

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.... 132,421,424 Op.cost (OP) 10,869,010 10,473,124 21,342,134 OP/TC 13.20% 20.91%   Revised margins as per letter date 16-02-2012 Particulars IT/ITES Packaging Unit Total Revenue 93,200,220 60,563,338 153,763,557 Total Op.cost (TC) 77,188,082 55233342 132,421,424 Op.cost(OP) 16,012,138 5,329,996 21,342,134 OP/TC 20. 74% 9.65%     10. In our opinion, the AO should not have taken refuge under an order passed on an earlier rectification petition by the assessee in which it had pointed out the non-consideration of the revised segmental results filed by it. Even that order dated 30-08-2013, in our opinion, was very cryptic. Relevant par....