TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 1183
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....der: "(i) If transactions are both with the AE and Non-AE, whether it is correct to adopt Entity level approach. (ii) Whether segmental results can be rejected for non auditing the same." 3. At the very outset, the ld. AR stated that similar issues involved in the present appeal were considered by the Tribunal in assessee's own case in ITA No. 1895/DEL/2017 for A.Y. 2012-13. It is the say of the ld. AR that the issues being identical, the same view should be taken. 4. Though the ld. DR heavily relied upon the order of the DRP, but could not bring any distinguishing decision in favour of the Revenue. 5. We have carefully considered the orders of the authorities below qua the issues. We find force in the contention of the ld. AR. Simil....
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....n the taxpayer is providing similar services to the AE as well as non-AE, there cannot be any non- allocation key and the taxpayer has made artificial bifurcation only to raise the profit; that when the taxpayer is doing same business with AE and non-AE, only logical conclusion is that same employees are doing work for providing services to AE and non- AE; that no audited account with detail has been given; that decision rendered by the coordinate Bench of the Tribunal in LG Electronics India Private Ltd. and Honeywell Electrical Devices & Systems India Ltd. (supra) are not applicable to the facts and circumstances of the case. 9. In the backdrop of the aforesaid facts and circumstances of the case, the first question arises for determina....
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....e on entity level. Section 92C unequivocally provides that the ALP in relation to 'an' international transaction shall be determined by any of the prescribed methods. In turn, rule 10B(1)(e) also talks of the net profit margin realized by the enterprise from 'an' international transaction. When the mandate of the section and the relevant rule is unambiguous so as to apply on each transaction, as is apparent from the use of the article 'an', then the computation of the ALP of 'an' international transaction on the entity level is inappropriate. Our conclusion that each international transaction is required to be separately scrutinized under Chapter-X also becomes apparent from the language of section 92(3) as....
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.... book includes inter alia the name of the employees, the month-wise payment for the work exclusively done for non-AE/domestic enterprises. All these details were available before ld. TPO who has not raised any query. This detail was also available before the DRP but has not been considered in the right perspective. 12. Now, the next question arises for determination is :- "as to whether segmental results can be rejected for non auditing the same?" 13. In case cited as Honeywell Electrical Devices & Systems India Ltd. (supra), the coordinate Bench of the Tribunal by relying upon the case of 3i Infotec Ltd. vs. ITO - (2013) 35 txmann.com 582 (Chennai) rendered by the Tribunal held that even if such segmental results are not shown in the....
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....s all the transactions are with AE. 16. Coordinate Bench of the Tribunal in Sysarris Software (India) Pvt. Ltd. (IT(TP)A.No.639/Bang/2012), available at page 441 of the paper book, while deciding the identical issue held that when there are international transactions of the taxpayer with AE only international transactions are to be adjusted for ALP adjustment. In the instant case also, transaction of the taxpayer with non-AE with which it is operating on different model are not to be taken for benchmarking the international transaction. 17. In view of what has been discussed above, we are of the considered view that AO/TPO/DRP have erred in disregarding the segmental result of the taxpayer by proceeding to consider the margin of the tax....