AI Drafter 
TaxTMI 
TaxTMI 
2017 (2) TMI 1413
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....P erred in not considering the purchase price adjustment of Rs. 38,617,716/- difference between the Constant Price and current Price due to exchange fluctuation. 5. Without prejudice to our submission made in ground No.4 above, TPO/DRP erred in not removing the 'Loss on Forex fluctuation' amounting to Rs. 30,403,593/- from the Operating Expenditure, which has arisen due to reinstatement of foreign currency done accordance with the accounting standards. 6. The TPO/DRP erred on facts and in law in not adding back depreciation of tested party as well as comparable companies since each companies followed different methods. 7. The TPO though removed Finance Charges of Rs. 6,248,428/-, not removed the bank charges of Rs. 941,599/- sitting in the "Administrative Expenses" Schedule. 7. TPO/DRP erred in not considered the "working capital adjustment" for determination of ALP by the TPO. 8. TPO/DRP erred in not considering the "power related adjustment' for providing for economic differences in determination of ALP. 9. The AO omitted to consider advance tax payment of Rs. 12,000,000/- while passing the final order. 10. The appell....
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.... year where for each component TP0 had recorded his categorical findings about the availability or lack of the details and evidence. Thereafter, the TPO came to a conclusion that the ALP for entire expenses nil except the service of ECB loan related work amounting to USD 8520. 4.3 According to the DRP, this amount of Rs. 209,59,067 has been debited in P&L a/c as management services fee under the head administrative services. It is seen from the record that the submission of' the assessee before this Panel is similar in substance as made before the TP0. It is observed that the assessee has claimed expenditure amounting to Rs. 1.54,17.137 for Technical Service and Rs. 3,24.54,364 for Royalty separately in the P&L account. The DRP was of the opinion that firstly it will be relevant to examine the main features of' the 'Technical Assistance Agreement" between the assessee and the AE, M/s.Infac Corporation, Korea dated 1St January 2011, whose terms and conditions govern all the transactions between them. 4.4 Thus, it is seen that various articles in agreement specify the nature of service and support to he rendered by the AE to the assessee and the related terms for payment in ret....
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....e, could not have been paid. Hence, the DRP came to a conclusion that the claim of the assessec could not be accepted. Against this, the assessee is in appeal before us. 5. We have heard both the parties and perused the material on record. Similar issue came before this Tribunal in assessee's own case for assessment year 2011-12 in ITA No.633/Mds./2016 wherein the Tribunal held as under:- "4. The similar issue came for consideration before this Tribunal in assessee's own case for assessment year 2010-11 in ITA No.745/Mds./2015 dated 12.08.2015. The Tribunal observed as follows:- 6. After hearing both sides, we are of the considered view that the entire matter has to be remitted back to the file of Ld. TPO for denovo consideration because both the assessee as well as the Revenue has not examined the issue with respect to the correct factual matrix. "Management services" and "Technical services" false under different field and the nature of work involved both these services are different. Further, when the assessee has made payments to its parent company it has to establish and justify the nature of payment and the nature of service received for the purpose ....
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....parability and unless adequate reasons are given for such adjustments, no adjustment can be allowed to the assessee. In the present case, the assessee has not established with facts the justification for these adjustments in its case vis-à-vis the comparables. Therefore, the DRP observed that the contention of the assessee cannot be accepted. Against this, the assessee is in appeal before us. 8. Before us, the ld.A.R submitted that it is into supply of automotive products (4 wheelers) to SINGLE ORIGINAL EQUIPMENT MANUFACTURER (OEM), where as SUPRAJIT ENGINEERING LTD is having products scatted into both automotive and non automotive markets to many OEM(s) and others. The non automotive segment command higher margins. Further, according to ld.A.R, the assessee is NOT into REPLACEMENT MARKET and there are no dealers of its products and supplies only to, where as SUPRAJIT ENGINEERING LTD is having more than 200 stockists/ dealers (160 dealers in 2009 to 300 in 2013) . The replacement market commands a higher profit. REF: A. Assessee's TP DOCUMENTATION: REFER PAPER BOOK 2 OF 2 PAGE NO 118 (PARA NO 6.7) 131-132 (SEEKING RISK ADJUSTMENT OF 5% AND ADJUSTMENT IN RESPECT O....
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.... AO required to reexamine the claim of risk adjustment and replacement adjustment claimed by the assessee and suitable adjustments to be given after apprising the TP documents submitted by the assessee. With this observation, we remit the issue to the file of AO for the purpose of determination of risk adjustment to be granted to the assessee. 11. The next Ground No.5 for our consideration is that Without prejudice to our submission made in ground No.4 above, TPO/DRP erred in not removing the 'Loss on Forex fluctuation' amounting to Rs. 30,403,593/- from the Operating Expenditure, which has arisen due to reinstatement of foreign currency done accordance with the accounting standards. 12. The facts of the issue are that according to ld.A.R this is an extraordinary non-operating expenditure. The ld.A.R submitted that out of Rs. 3,04,03,592, debited as Foreign exchange Loss during the year, a sum of Rs. 1,52,78,072 is unrealized (arising out of year end translation of the Creditors for foreign supplies). Further, ld.A.R relied on the judgement of the Tribunal, BANGALORE in the case of AIRBUS INDIA OPERATIONS PRIVATE LTD (ITA NO: IT(TP)A NO 35/BANG/2014) dated 10.10.2014. 13. ....