TaxTMI 
TaxTMI 
2018 (6) TMI 1106
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....raised objections before the Dispute Resolution Panel [DRP], DRP has given certain directions whereby the addition has been reduced to Rs. 16.30 Crores. There was another issue of rebate claimed on CENVAT credit to an extent of Rs. 3,17,00,903/- which is also confirmed in the original proceedings. On further appeal by assessee, the ITAT vide order in ITA No. 1851/Hyd/2012, dt. 11-03-2016, directed the TPO to re-compute the Arm's Length Price [ALP] in accordance with the directions given in the order and also to verify the claim of rebate on CENVAT. In the consequential proceedings, the TPO vide order dt. 21-03-2017 (wrongly typed as 21-03- 2007 in the assessment order) has rejected the contentions of assessee and confirmed the adjustment made of Rs. 16.30 Crores. However, on the second issue of CENVAT credit, AO after examination, has allowed the benefit to assessee. Thus, the only issue in contention is with reference to TP adjustment of Rs. 16.30 Crores. 3. In the appeal in ITA No. 1851/Hyd/2012, dt. 11- 03-2016, assessee has contested the issue of non-acceptance of allocation of cost between AE and non-AE segments and further allocation of cost towards underutilization of the....
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....includes the said costs and does not affect the profit margin of the assessee. We find that sub-rule (2) to Rule 10B of I T Rules provide for determination of Arm's Length Price after making FAR (Functions, Assets and Risks) Analysis. The Rule prescribes that necessary adjustments are to be made before comparing the assessee with any other comparable performing similar functions, applying similar assets with same or similar risks involved. For this purpose, the TPO has to necessarily make the FAR Analysis and make suitable adjustments wherever necessary to bring a comparable on par with the assessee, as far as the financial results are concerned. We also agree with the contention of the assessee that where suitable adjustments are not possible, such company cannot be taken as a comparable to the assessee. However, it is pertinent to note that no company is exactly similar to the other company and there are always some differences between the companies. Therefore, it has been held that the comparability has to be among the most comparable companies and the adjustments are to be carried out to the possible extent. In the case before us, we find that the Assessing Officer as well as t....
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....t assessment order so that assessee can raise the objections before the Ld. DRP and since the provisions of the Act have not been followed by the AO, the final assessment order passed is bad in law. Ld. Counsel relied on the following case law on the issue: i. JCB India Ltd., Vs. DCIT [85 taxmann.com 155 (Delhi)] / [398 ITR 189] (Delhi); ii. Turner International India (P) Ltd., Vs. DCIT [82 taxmann.com 125 (Delhi)] / [398 ITR 177] (Delhi); iii. CIT Vs. C-Sam (India) (P) Ltd., [84 taxmann.com 261 (Gujarat)] / [398 ITR 182] (Gujarat); iv. Vijay Television (P) Ltd., Vs. DRP, Chennai [46 taxmann.com 100 (Madras) / [369 ITR 113] (Madras); v. ITAT, Delhi Bench in the case of M/s. Globerian India Pvt. Ltd., Vs. DCIT (ITA No. 2265/Del/2014, dt. 12-10- 2017); vi. ITAT, Pune Bench in the case of M/s. Eaton Industrial Systems Pvt. Ltd., Vs. DCIT (ITA No. 536/PUN/2014, dt. 12-04-2018); vii. ITAT, Pune Bench in the case of DCIT Vs. M/s. Rehau Polymers Pvt. Ltd., (ITA No. 566/PUN/2015, dt. 14-06- 2017); viii. ITAT, Pune Bench in the case of Agfa India Pvt. Ltd., Vs. ACIT (ITA No. 341/PN/2014, dt. 28-10-2015); ix. So....
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....ass the final assessment order. [Para 25]" 9. The Hon'ble Delhi High Court has in turn followed the judgments in the case of Turner International India (P) Ltd., Vs. DCIT [82 taxmann.com 125 (Delhi)] / [398 ITR 177] (Delhi); and CIT Vs. C-Sam (India) (P) Ltd., [84 taxmann.com 261 (Gujarat)] / [398 ITR 182] (Gujarat); and also the decision in the case of Citi Financial Consumer Finance India (P) Ltd., in ITA No. 275 (Delhi) of 2015, dt. 17-07-2015. 10. The Co-ordinate Bench at ITAT, Pune in the case of Soktas India (P) Ltd., Vs. ACIT, Kolhapur [77 taxmann.com 19 (Pune-Trib)] / [162 ITD 366 (Pune-Trib)]; has considered the similar issue and held as under: "* In view of the provisions of section l44C impliedly where the TPO proposes any variation in the income or loss returned by the assessee, which is prejudicial to the interest of assessee, the Assessing Officer shall in the first instance forward the draft of the proposed assessment order to the assessee and thereafter, if no objections are received and/or the assessee files his acceptance to the variation to the Assessing Officer, then the Assessing Officer is empowered to complete the assessment within one mont....