TaxTMI 
TaxTMI 
2017 (2) TMI 1114
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....6,62,100/- . 3. Without prejudice to the foregoing, in spite of internal comparable figures being available, the assessing officer has erred in ignoring the profitability of internal comparables being sale to AE not at arm's length. 4. Without prejudice to the foregoing, the assessing officer has erred in selecting the comparables under TNMM and rejecting the comparables selected by the Company without giving justifiable reasons for the same. 5. On the facts and circumstances of the case, proposed addition of Rs. 2,70, 22,100/- in respect of purchase/sale of traded/ finished goods from/to the associate enterprises is bad in law. 6. On the facts and in the circumstances of the case and in law, addition of Rs. 6,40,000/- in respect of issue of guarantee to the associate enterprise is bad in law. 7. Without prejudice to the foregoing, an addition of Rs. 6,40,000/- in respect of issue of guarantee to the associate enterprise is excessive and unreasonable. 8. Without prejudice to the foregoing, the addition of Rs. 6,40,000/- in respect of issue of guarantee to the associate enterprise is double addition, as the another proposed addition of Rs. 2,70,22,100/- is in respect....
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....bles selected by the TPO worked out to 7.93% and he proposed an adjustment of Rs. 25,56,49,000/-. The Assessing Officer passed the draft assessment order against which the assessee filed objections before the DRP. However, the objections of the assessee were rejected but the DRP directed the Assessing Officer to calculate the Arm's Length Price with respect to transactions with Associate Enterprise and not the entire turnover. Accordingly, the Assessing Officer in the final assessment order made an adjustment of Rs. 2,76,62,100/- on account of international transaction relating to its export of spares and on account of guarantee of Rs. 6,40,000/-. The assessee is in appeal against the order of the Assessing Officer. 5. The Ld. Authorised Representative for the assessee fairly admitted before us that the limited issue which needs adjudication in the case is that in case TNMM is held to be most appropriate method, then the concern Bosch Chassis System India Ltd. is to be excluded from the final set of comparables having different financial year ending. He further pointed out that even M/s. Escorts Ltd. has different financial year and following the ratio laid down in Dover India (P)....
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....'s order. 8. The Ld. Authorised Representative for the assessee before us fairly admitted that in case the concern Bosch Chassis System India Ltd. is excluded from the final list of comparables, while applying TNMM method, then the margins shown by the assessee in the mean margins of the comparables were within the +/-5% range and no adjustment is to be made in the hands of the assessee on account of Transfer Pricing provisions. He fairly agreed to adoption of TNMM for benchmarking international transaction of the assessee. 9. The grounds of appeal No.1 and 2 raised by the assessee are general in respect of the entire Transfer Pricing adjustment and the same are dismissed. 10. The issue raised vide ground of appeal No.3 is for application of CUP method which is also dismissed because of the admission of the Ld. Authorised Representative for the assessee. 11. The issue raised by way of ground of appeal No.4 is against exclusion of Bosch Chassis System India Ltd. and non-inclusion of Escorts Ltd. The assessee has placed on record the financials of Bosch Chassis System India Ltd. wherein at Page 404 of the paper book, the calendar year has been adopted by the said concern as its a....
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....gth provisions. Accordingly, we direct the Assessing Officer to work out the margins of the comparables and compare it with the PLI of the assessee. The Ground of appeal No.4 raised by the assessee is thus partly allowed. 12. The Ground of appeal No.5 raised by the assessee is general in nature is dismissed. 13. The additional ground of appeal raised by the assessee is against disallowance of working capital adjustment while applying the Transfer Pricing provisions. The Ld. Authorised Representative for the assessee pointed out that complete financial data of the assessee and also the comparables picked up by the Transfer Pricing Officer applied for benchmarking the international transaction are available on record and in view of the various decisions of the Pune Bench of the Tribunal the said plea of the assessee may be accepted. 14. We find merit in the plea of the assessee wherein complete facts are available on record and the Assessing Officer/Transfer Pricing Officer need to verify the same. Accordingly, we admit the additional ground of appeal raised by the assessee and direct the Assessing Officer to decide the issue of allowability of working capital adjustment in accord....
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....he present appeal is with regard to the facility provided by the assessee to its AE under which Corporate Guarantee was given by the assessee on behalf of the subsidiary. The Transfer Pricing Officer while benchmarking the international transaction of the assessee was of the view that against the provision of Bank Guarantee, the assessee should have charged some amount as Guarantee fee and he worked out the above in the hands of the assessee by adopting the Guarantee fee @1%, i.e. resulting in addition of Rs. 6,40,000/-. The assessee is in appeal against the order of the Assessing Officer/ Transfer Pricing Officer. The Ld. Authorised Representative for the assessee has placed reliance on the ratio laid down by the Mumbai Bench of the Tribunal wherein vide para 11 after referring to the decision of Hon'ble Bombay High Court, the Tribunal had held that rate of 0.5% is justified. Applying the same ratio, we direct the Assessing Officer to apply the rate of 0.5% as charges for providing Bank Guarantee to the Associate Enterprise and restrict the addition accordingly. Grounds of appeal No.6 to 8 raised by the assessee are thus partly allowed. 21. The last issue raised by way of grounds....