TaxTMI 
TaxTMI 
2017 (4) TMI 1331
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....ces ("Ites") transaction entered by the Appellant with its associated enterprise; 3. The learned AO/TPO erred, in law and in facts, by not accepting the economic analysis undertaken by the Appellant in accordance with the provisions of the Act read with the Rules and conducting a fresh economic analysis for the determination of the ALP in correction with the impugned international transaction and holding that the Appellant's international transaction is not at arm's length; The learned AO/TPO erred, in law and in facts, by determining the arm's length margin/price using only FY 2011-12 data which was not available to the Appellant at the time of complying with the transfer pricing documentation requirements; 5. The learned AO/TPO erred in rejecting certain comparable companies by applying the following quantitative and qualtitative filters; a) The learned AO/TPO erred, in law and in facts, by rejecting certain comparable companies identified by the Appellant for having different accounting year ( i.e. companies having accounting year other than March 31 or companies whose financial statements were for a period other than 12 months); b) The learned AO/TPO erred , in law and in ....
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....d also by undertaking a negative working capital adjustment; 12. The learned AO/TPO erred, in law and in facts, by not granting depreciation adjustments to account for differences in the rate of depreciation charged by the Appellant vis-à-vis the comparable; 13. The learned AO/TPO, in law and in facts, by not allowing capacity adjustments to account for differences in the capacity utilization of the Appellant vis-à-vis the comparables; 14. The learned AO/TPO, in law and in facts, by not making suitable adjustments on account of differences in the risk profile of the Appellant vis-à-vis the comparables, while conducting comparability analysis; 15. The learned AO has erred, in law and in facts, by levying interest of INR 2,08,11,784 and INR 93,819, under section 234B & 234C of the Income Tax Act 1961, respectively; 16. The learned AO has erred, in law and in facts, in initiating penalty proceedings u/s 271(1)(c) of the Act. The Appellants submits that each of the above grounds is independent and without prejudice to one another. The Appellant craves leave to add, alter, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time befo....
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....nbsp; 5. The ld. AR of the assessee has submitted that the TPO has applied a turnover filter of less than one crore while selecting the comparables whereas no higher limit of turnover was applied by the TPO. He has thus submitted that when turnover was considered as a relevant factor by the TPO then both the lower end and higher end of turnover filter should have been applied. In support of his contention he has relied upon the decision dated 02.07.2015 of Hon'ble Punjab & Haryana High Court in case of Agilent Technologies (International) Pvt. Ltd. Vs ACIT in ITA No. 121 of 2014 (O & M) and submitted that the Hon'ble High Court has upheld the order of the Tribunal for considering the impact of the turnover on the comparability. He has also relied upon the decision dated 16.09.2015 of Hon'ble Bombay High Court in case of CIT Vs M/s. Pentair Water India Pvt. Ltd. in Tax Appeal No. 18 of 2015. Thus, the ld. AR has submitted that the Hon'ble High Court has again upheld the order of the Tribunal wherein the companies having huge turnover were excluded by the Tribunal. Thus the ld. AR has submitted that if the filter of ten times of the turnover of the assessee is applied on both sides ....
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.....78 crores while in the case of the Assessee the turnover is around Rs. 11 crores. Therefore, on the basis of the turnover filter itself this company cannot be regarded to be comparable to the Assessee company and accordingly, we do not find any infirmity in the finding of CIT(A) while he excluded this company on the turnover criteria following the decision of this tribunal in : Sony India (P) Ltd. vs. DCIT, 114 ITD 448 Delhi, E-Gain Communication, 2008 TIOL 282 ITAT (Pune) Deloittee Consulting India Pvt. Ltd. vs. DCIT, ITA No.1082/Hyd/2010 Genisys Integrating System (India)(P.) Ltd. vs DCIT, 53 Sot 159 (Bang)" 6. The said findings of the Tribunal in respect of the said three Companies are on the basis of appreciation of evidence on record. We find no infirmity in the said findings of the Tribunal on that count. In fact, the Tribunal has endorsed the views of the CIT Appeals whilst coming to such conclusions. The concurrent findings of facts arrived at by the Authorities below, cannot be re-appreciated by this Court in the present Appeal." 8. Thus the Hon'ble High Court has upheld that there was no infirmity in finding of the Tribunal on this issue wherein it was ....
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....P in the case of the assessee." 10. Thus it is clear that the DRP has directed the TPO to consider the foreign exchange fluctuation in respect of the assessee as well as the comparables as operating in nature. Since the assessee has contented that the TPO has not given effect to the said directions of the DRP, accordingly we direct the AO / TPO to give effect to the directions of the DRP on this issue. 11. The next issue raised by the assessee is regarding incorrect margins computed by the TPO in respect of certain comparable companies. The ld. AR of the assessee has pointed out that the DRP has directed the TPO to recompute the margins of these comparable companies by excluding certain components which are found to be not in operating in nature. However, the TPO has not given effect to the said directions of DRP. The ld. DR has submitted that this is only a matter of rectification and not appeal. 12. Having considered the rival submissions and careful perusal of the directions of the DRP we find that the DRP in para 10.1 has dealt with this issue as under. "10.1 Panel: In respect to the provision for doubtful debts, provision written back, bank charges, miscellaneous income et....