AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (7) TMI 822
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.... Rs. 97,93,643/-. Since the assessee company had entered into international transactions with its AE, the Assessing Officer referred the case to the TPO for determination of the ALP of the international transaction entered into by it u/s 92 CA (1) of the I. T. Act, 1961. Rejecting the various explanations given by the assessee, the TPO proposed upward adjustment of Rs. 55,42,782/- being the difference in the ALP of the international transaction. Thereafter the Assessing Officer made the addition of Rs. 55,42,782/- to the total income of the assessee on account of the ALP of the international transaction entered into by it with its AE. The Assessing Officer in the draft assessment order also made addition of Rs. 39,010,/- by restricting the depreciation to 15% on computer accessories and peripheral as against 60% claimed by the assessee. 3. The assessee approached the DRP who deleted the disallowance on account of depreciation. However, so far as the addition on account of ALP of the international transaction is concerned they upheld the action of the Assessing Officer/ TPO. 4. Aggrieved with such order of the Assessing Officer/ TPO/ DRP, the assessee is in appeal before the T....
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....ce with the provisions of Rule 10B(3) of the Income-tax Rules. e) The TPO as well as the DRP and consequently the AO has erred in law and on facts and in the circumstances of the case in erroneously rejecting the assessee's claim of adjustment in the comparables on account of excise and custom duty while analyzing and comparing net margin of the assessee and that of the comparable companies to eliminate material difference in consonance with the provisions of Rule 10B(3) of the Income-tax Rules. f) The TPO as well as the DRP and consequently the AO has erred in law and on facts and in the circumstances of the case in erroneously holding that no accurate adjustments can be made inspite of relevant data and information being made available to them. g) The TPO as well as the DRP and consequently the AO has erred in law and on facts and in the circumstances of the case in considering in the ratio analysis as acceptable comparable companies even those previously rejected by the TPO i.e. Jaya Hind Industries and Instrumentation Ltd. while adjudicating upon the issue of allowing adjustments for the underutilization of installed capacity to the assessee. ....
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....itation since it should have been passed on or before 31st December, 2009. However, even the draft assessment order was passed on 29th October, 2010. Accordingly, he submitted that the orders of the Ld. AO and TPO should be quashed on this preliminary legal ground alone. 9. Referring to the decision of Delhi Bench of the Tribunal in case of Calance Software Pvt Ltd Vs. DCIT vide order dated 23.03.2018 for A. Y. 2006-07, he submitted that the Tribunal under identical circumstances has held that the reference to the TPO is not sustainable since the quantum of international transaction is below the monetary limit of Rs. 5 crores and the Assessing Officer should have passed the order within the prescribed time provided under the statute. Since the assessment has become time barred the additional ground raised by the assessee was decided in favour of the assessee. He accordingly submitted that since the reference in the instant case to the TPO by the Assessing Officer is invalid as the international transaction is below the monitary limit of Rs. 5 crores and since the time limit for the issue of the order in case of no TPO reference u/s 153 (1) of the IT Act has got expired on 31.12.....
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....low the monetary limit of Rs. 5 crore. Prima facie, it appears that the contention of the Ld. AR is supported by the Instruction No.3/2003. Therefore, we have to verify whether that Instruction has a binding force or it is just an administrative Instruction within the Departments day to day activities. The Circular has been considered by the Andhra Pradesh High Court in case of CIT Vs. Nayana P Dedhia 270 ITR 572 wherein it is held that the authorities responsible for administration of the Act shall observe and follow any such orders, instructions and directions of the board. This is actually reiterated from the decision of the Hon'ble Apex Court in case of UCO Bank Vs. CIT 237 ITR 889 = 2002-TIQL-697-SC-IT-LB . But at the same time the Hon'ble Supreme Court also held that the Circulars can be adverse to the IT Department but still are binding on the authorities of the Income Tax Departments but cannot be binding on the assessee if they are adverse to the assessee. These ratio laid down by the Apex Court has an impact on the argument of the Ld. AR regarding the Board's Instruction to be followed. The Special Bench of this Tribunal also in case of Aztec Software....
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....,44,16,476/- and thus making additions of Rs. Rs. 92,29,336/- on wholly illegal, erroneous and untenable grounds. 2) The order of assessment is bad in law. 3) That the learned AO has erred in law, on facts and in the circumstances of the case in making addition on account of arms' length price under section 92CA(3) of the Income-tax Act amounting to Rs. 92,29,339/- on wholly illegal, erroneous and untenable grounds. 4) The learned AO's order based on the findings of the learned Transfer Pricing Officer and the directions of the learned Dispute Resolution Panel U/S.144C(5) of the Income-tax, is erroneous, untenable in law and on facts for the various reasons and not limited to the following: - a) The TPO as well as the DRP and consequently the AO has erred in law and on facts and in the circumstances of the case in erroneously rejecting the comparable company i.e. Adarsh Plant Protect Limited selected under the search driven process followed by a detailed FAR Analysis (functions performed, assets utilized and risk assumed) undertaken by the assessee. b) The TPO as well as the DRP and consequently the AO has erred in law and on facts and i....