2017 (6) TMI 1225

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....any is engaged in manufacturing of material handling equipments. The activities of the assessee are classified in three segments viz. manufacturing, trading and service. The issue in present appeal is with respect to manufacturing activity. During the period relevant to assessment year under appeal, the assessee had entered into various international transactions with its AEs. Therefore, reference u/s 92CA of the Act was made to the Transfer Pricing Officer for determination of arm's length price of the transactions reported in Form- 3CEB filed by the assessee. To benchmark the transactions the assessee applied Transactional Net Margin Method (TNMM). The assessee selected four companies as comparables with average margin of 5.94%. The Trans....

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....n of inappropriate comparable companies without conducting a structured search: The DRP erred in accepting certain non-comparable companies. 7. Non grant of credit for taxes deducted at source: The DRP has erred in not granting credit for taxes deducted at source of Rs. 40,11,150/- 8. Erroneous levy of interest under section 234B of the Act : The DRP has erred in levying interest under section 234B of the Act. 9. Initiation of penalty proceedings under section 271(1) (c) of the Act : The DRP has erred in initiating penalty proceedings under section 271(1) (c) of the Act." 4.1 The ld. AR of the assessee submitted that the assessee is seeking exclusion of W.M.I Cranes Ltd and T.R.F Ltd from the list of comparables. W.M.I Cranes Lt....

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....ed reliance on the decision of Co-ordinate Bench of the Tribunal in the case of Cummins Turbo Technologies Limited Vs. Deputy Commissioner of Income Tax, in ITA No. 593/PUN/2015, assessment year 2010-11, decided on 28.12.2016 to emphasis that the company having extraordinary events during the relevant period should not be considered as good comparable. 4.3 The ld. AR submitted that if W.M.I Cranes Ltd. is excluded from the list of comparables, the assessee would fall within +/- 5% range, as arithmetic means of the comparables would be 3.20 % as against the operating margin of the assessee at 2.16%. 4.4 The ld. AR submitted that T.R.F Ltd was included in the list of comparables by the assessee. Subsequently, it transpired that the comp....

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....on the decision rendered in the case of Aptara Technologies Private Limited Vs. Assistant Commissioner of Income Tax (ACIT) in ITA No. 259/PUN/2015 for assessment year 2010- 11 decided on 31.05.2016, wherein similar proposition was laid down by the Tribunal. 7. Thus, in view of the facts of the case and the decisions of Coordinate Bench of the Tribunal, we find merit in the submission of the assessee. Accordingly, we direct the Assessing Officer/Transfer Pricing Officer to exclude W.M.I Cranes Ltd from the list of final comparables. The ld. AR has pointed that after exclusion of W.M.I Cranes Ltd., arithmetic mean of comparable companies would fall within +/- 5% range. Thus, in view of the statement made by ld. AR of the assessee, we are ....