TaxTMI 
TaxTMI 
2017 (4) TMI 1402
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....following international transaction with its AEs: The assessee sought to justify consideration received for international transactions entered into with its AE to be at arm's length price. The assessee-company submitted that Transfer Pricing (TP) study adopting operating profit to sales (OP/to sales) as profit level indicator for TP Study. The assessee-company applied TNMM which was considered to be most appropriate method for the purpose of bench marking its international transactions. The assessee-company's profit margin was computed at 4.9% in respect of manufacturing segment. For the purpose of comparison, the assessee-company had chosen 3 comparable entities and arithmetical average of the said company was computed at 4.77%. According to the assessee-company, its PLI was within range of +/- of the arithmetical mean of the comparable entities. Hence, it was claimed that international transaction of the assessee with its AEs are at arm's length price. The assessee-company had chosen the following 3 entities whose average margin of sales was computed at 4.77%, as comparables: Amtech Electronics (India) Ltd., Chemtrols Industries Ltd. PMA Controls India Ltd. The Ass....
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....15/12/2014 u/s 143(3) r.w.s. 144C of the Act making TP adjustment of Rs. 5,28,59,604/- after making disallowance towards provision for warranty of Rs. 17,28,452/- and towards provisions for obsolescence of Rs. 43,54,177/-. 6. Being aggrieved by the order of assessment, the assessee is in appeal in ITA No.164/Bang/2015 raising the following grounds of appeal: That on the facts and circumstances of the case and in law: 1. The learned AO has erred in assessing the total income of the Appellant at As. as against returned income of Rs. 2,641 ,652]- computed by the Appellant; Grounds Relating to transfer pricing matters On the facts and in the circumstances of the case and in law: 2. The learned ACY Transfer Pricing Officer ("TPO") have erred, in law and in facts, by making an addition of As. 33,520,573 to the total income of the Appellant on account of adjustment in the arm's length price of the international transactions entered by the Appellant with its associated enterprises; 3. The learned AO/ TPO and the learned DRP have erred, in law and in facts, by rejecting the transfer pricing documentation maintained by the Appellant and contending that the informatio....
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....accordance with the law. General Grounds 10. The learned AO has erred, in law and in facts, by interest Of 111,953 and under section 234B, 234C and 2340 Of the Act, respectively. 11. The learned AO has erred, in law and in facts, in initiating penalty proceedings under section 271 of the Act. The Appellant 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 before or at the time of hearing of the appeal, so as to enable the Hon'ble Tribunal to decide on the appeal in accordance with the law. 7. Ground Nos.1, 2 and 3 are general in nature. Ground No.4 was not pressed during the course of hearing. 8. Ground No.5 challenges the action of the TPO as confirmed by the DRP for not adjusting for extraordinary expenses/of nonrecurring expenses made by the assessee-company to operating cost like high manufacturing cost, high personnel cost, execution of low margin deals and high import content cost while computing the operating margin of the company. It is the contention of the assessee-company that du....
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....ght to have excluded the abnormal/ extraordinary expense on account of write off of inventory during the year forming part of the cost of goods sold from the operating cost of the Appellant; 16. The learned TPO/ AO and the learned DRP ought to have considered the CUP information pertaining to similar products sold by AE to third parties for determining the arm's length nature of the international transaction of purchase of raw materials from its AEs; It is prayed that the additional grounds may be admitted as the additional grounds are only consequential and may be admitted in the light of the following decisions: National Thermal Power Co. Ltd. vs. CIT (229 ITR 383)(SC) Jute Corporation of India Ltd. (187 ITR 68)(SC) and Ahmedabad Electricity Co. Ltd. (199 ITR 351)(Bom)(FB) 10. The additional grounds of appeal are admitted in view of the fact that no fresh investigation of material is required.However, since the TPO had no occasion to adjudicate on this matter, since these grounds were not raised before him, we remand the matter back to the file of the TPO for fresh adjudication in accordance with law. 11. In regard to other g....