TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 631
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....th M/s.Greaves Limited and set up two joint venture companies M/s.SAME Greaves Limited and M/s.SAME Greaves Tractors Limited. 4. In 2002, the SAME Group of companies acquired the stake of Greaves Ltd. in the two joint venture companies, after which the two Indian companies were renamed M/s.SAME India and M/s.SAME Deutz-Fahr India Private Limited. 5. To achieve operational and financial synergy and minimize operating costs, M/s.SAME Deutz-Fahr India Private Limited was amalgamated with SAME India with effect from 1st April, 2002. The amalgamation was approved by the Madras High Court in February, 2003 and in April, 2004 the amalgamated company (the respondent assessee) was renamed M/s.SAME Deutz Fahr India Private Limited. The respondent assessee is engaged in the manufacture and export of tractors. 6. The respondent assessee filed its return of income for the assessment year in question, declaring a loss of Rs. 3,30,16,163/-. In the assessment proceedings, the Assessing Officer found international transactions of Rs. 29,86,30,802/- relating to purchase of raw materials and components net sale of returns, Sale of components, purchase of Dies and Moulds, Interest on External Comme....
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....rd may prescribe, namely.- (a) comparable uncontrolled price method; (b) resale price method (c) cost plus method; (d) profit split method; (e) transactional net margin method; (f) such other method as may be prescribed by the Board. (2) The most appropriate method referred to in sub-section (1) shall be applied, for determination of arm's length price, in the manner as may be prescribed. Section 92CA. Reference to Transfer Pricing Officer: (1) Where any person, being the assessee, has entered into an international transaction in any previous year, and the Assessing Officer considers it necessary or expedient so to do, he may, with the previous approval of the Commissioner, refer the computation of arm's length price in relation to the said international transaction under Section 92C to the Transfer Pricing Officer." 8. The Assessing Officer referred the international transaction to the Transfer Pricing Officer (TPO) for determination of the Arm's Length Price of the international transaction. 9. The respondent assessee adopted Transactional Net Margin Method (TNMM) as the appropriate method to determine the ALP of its international transactions of ....
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....erial placed on record. M/s.HMT Ltd., is in the segment of manufacturing of tractors and power tillers. The functionality of the M/s.HMT Ltd., and the assessee are more or less in similar. The Ld. AR of the assessee submitted that all the functions of M/s.HMT Ltd., and M/s.VST Tillers are one and the same. The TPO has rejected M/s.HMT Ltd., as comparable merely because of the turnover. The turnover of the M/s.HMT Ltd., for the AY 2005-06 was Rs. 248.00 Cr. as against the assessee's company turnover of Rs. 120.00 Cr. It is impossible to find out comparable with all similarities inclusive of turnover. Even M/s.VST Tiller selected by TPO was with Rs. 130.00 Cr. The turnover filter with turnover 3-5 times is acceptable for selecting the comparable as per the decisions of the tribunals. In the Appellant's case, the TPO has adopted the turnover filter and the M/s.HMT Ltd., being functionally similar and the turnover was only two times of Appellant, we are of the considered opinion that the TPO should include M/s.HMT Ltd., as comparable. The case laws relied upon by the assessee also supports arguments of the assessee. Bo the assessee and TPO adopted TNMM as most appropriate met....
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....shall be- (a) filed within one hundred and twenty days from the date on which the order appealed against is received by the Assessee or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. (b) [***]; (c) in the form of a memorandum of appeal precisely stating therein the substantial question of law involved. (2A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period. (3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (4) The appeal shall be heard only on the question so formulated, and the respondents shall at the hearing of the appeal, be allowed to argue that the case does not involve such question: Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such quest....
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....ed not necessarily be a substantial question of law of general importance. In Guran Ditta v. Ram Ditta [(1927-28) 55 IA 235 : AIR 1928 PC 172] the phrase substantial question of law as it was employed in the last clause of the then existing Section 100 CPC (since omitted by the Amendment Act, 1973) came up for consideration and their Lordships held that it did not mean a substantial question of general importance but a substantial question of law which was involved in the case. In Sir Chunilal case [1962 Supp (3) SCR 549 : AIR 1962 SC 1314] the Constitution Bench expressed agreement with the following view taken by a Full Bench of the Madras High Court in Rimmalapudi Subba Rao v. Noony Veeraju [AIR 1951 Mad 969 : (1951) 2 MLJ 222 (FB)] : (Sir Chunilal case [1962 Supp (3) SCR 549 : AIR 1962 SC 1314] , SCR p. 557) "When a question of law is fairly arguable, where there is room for difference of opinion on it or where the Court thought it necessary to deal with that question at some length and discuss alternative views, then the question would be a substantial question of law. On the other hand if the question was practically covered by the decision of the highest court or if the ge....
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.... balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis. (See Santosh Hazari v. Purushottam Tiwari [(2001) 3 SCC 179] .) 24.The principles relating to Section 100 CPC relevant for this case may be summarised thus : (i) An inference of fact from the recitals or contents of a document is a question of fact. But the legal effect of the terms of a document is a question of law. Construction of a document involving the application of any principle of law, is also a question of law. Therefore, when there is misconstruction of a document or wrong application of a principle of law in construing a document, it gives rise to a question of law. (ii) The High Court should be satisfied that the case involves a substantial question of law, and not a mere question of law. A question of law having a material bearing on the decision of the case (that is, a question, answer to which affects the rights of parties to the suit) will be a substantial question of law, if it is not covered by any specific provisions of law or settled legal principle emerging from binding precedents, and, involves a debatable leg....