TaxTMI 
TaxTMI 
2015 (5) TMI 1027
X X X X Extracts X X X X
X X X X Extracts X X X X
....64,000 made by the A.O. u/s 14A of the Act to an ad-hoc disallowance of ` 5,00,000/ without assigning any reason therefor. 2. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in deleting the addition of ` 16,07,10,000 made u/s 92CA by the Transfer Pricing Officer / Assessing Officer." 2. During the year under consideration, the assessee had received interest on investment made in the subsidiary company which was exempt under section 10(23G) of the Act. The Assessing Officer noted that the assessee has invested a sum of ` 107.16 crores in its subsidiary companies. Accordingly, the Assessing Officer proposed to disallow the expenditure under section 14A by invoking the provisions of rule 8D of the I.T. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e in the subsidiary company which was claimed as exempt under section 10(23G) of the Act. The assessee has not incurred any expenditure in respect of the investment made in the subsidiary company and consequently, for earning exempt income in the shape of interest. Thus, he has supported the order of the learned CIT(A) that ` 5,00,000, is a reasonable disallowance. 6. Having considered the rival submissions as well as the material on record, we note that the Assessing Officer has not disputed the fact that the entire investment has been made by the assessee from its own funds and, therefore, the Assessing Officer has not made any disallowance under section 14A, on account of interest expenditure. There is no quarrel on the point that pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has recorded international transaction during the year under consideration as under:- Sr.no. Category Description Amount of Transaction (` in lakh) 1. Imports - goods components and spare parts EIL imports raw material from its group entities for its manufacturing activity ` 31624.14 2. Exports - manufactured Blades / CBCT EIL manufacturers blades / CBCT for export (e-40 Model) ` 342.27 3. Import - capital goods EIL imports capital goods like machinery, accessories, spares, etc., from its group entities ` 5772.57 4. Reimbursement of guarantee charges Reimbursement of guarantee charges ` 243.33 5. Sale of computer Sale of computer ` 0.87 9. In its transfer p....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 299.68 -80.72 -26.94% 2. Suzion Energy Ltd. 1917.50 430.92 22.47% 3. Vestas R rb India Ltd. 553.36 23.88 4.32% 10. Before the learned CIT(A), the assessee challenged the action of the Transfer Pricing Officer and contended that the profit margin of Suzlon Energy Ltd. was wrongly taken by the Transfer Pricing Officer before depreciation & interest and further Suzlon Energy Ltd., is not carrying out the various activities for installation and commissioning of wind mills, therefore, the said company is not functionally comparable with the assessee. The assessee submitted that Suzlon Energy Ltd., under three different legal entities / companies, is carrying out various activities of supplyin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of Suzlon Group of companies without giving an opportunity to the Assessing Officer / Transfer Pricing Officer. Thus, the learned Departmental Representative submitted that the learned CIT(A) has violated the provisions of rule 46A of the I.T. Rules, while accepting the fresh evidence / details produced by the assessee. He further contended that there is no provision of combining the results of more than one company as done by the learned CIT(A), therefore, the order of the learned CIT(A) is not sustainable as per the provisions of the transfer pricing. 12. On the other hand, the learned Counsel for the assessee has submitted that it is not a fresh evidence or details filed by the assessee before the learned CIT(A) but the assessee too....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and other related activities of installation and commissioning were being performed by the other group companies viz. Suzlon Infrastructure Ltd. Further, the land purchased and development of site work is dealt with by Sarjan Realities Ltd., a group company of Suzlon Energy Ltd. Therefore, Suzlon Energy Ltd. was engaged in the activities of supply alone whereas the assessee is in the business of supply, installation, commissioning as well as development of sites. Thus, it is clear that the business activities carried out by the assessee are not comparable with the Suzlon Energy Ltd., for the purpose of determination of arm's length price. The Transfer Pricing Officer included the Suzlon Energy Ltd. in the computation of arm's lengt....