TaxTMI 
TaxTMI 
2020 (7) TMI 660
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....assed u/s 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 pursuant to the directions of Ld. Dispute Resolution Panel-1, Mumbai (DRP) u/s 144C(5) dated 30/10/2013. The assessee has been saddled with Transfer Pricing Adjustment of Rs. 347.41 Lacs in the final assessment order, which is the substantial subject matter of this appeal. The assessee is before us on following grounds of appeal: - 1. That on the facts and circumstances of the case and in law the Ld. A.O erred in assessing the income of the appellant under the normal provisions of the Act at Rs. 69,69,74,500/- against the returned income of Rs. 66,22,32,943/- based on the directions received from Hon'ble Dispute Resolution Panel ("DRP") upholding the adjustment to the transfer price proposed by the Ld. Transfer Pricing Officer ("TPO"). 2. Transfer Pricing: - 2.1 That on facts and circumstances of the case and in law the Ld. A.O/TPO erred in proposing and the Hon'ble DRP further erred in upholding an adjustment of Rs. 3,47,41,557/- in respect of the international transactions pertaining to export of chemical additives, alleging that the same to be not at arm's length in terms of the provisions....
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.... the transactions of the appellant with AE of one joint venture partner is generally monitored by the other joint venture partner who would want to protect his interest in profits from the joint venture. 2.9 That on facts and circumstances of the case and in law the Ld. TPO/DRP/AO erred in rejecting the whole entity approach adopted by the appellant for benchmarking the export of chemical additive which the Revenue Authorities (Department) had accepted in the previous assessment for A.Y 2002-03, A.Y 2003- 04, A.Y 2004-05 and A.Y 2005-06. 2.10 That on facts and circumstances of the case and in law the Ld. TPO /DRP/AO erred in rejecting the segmental information between the AE and non-AE as provided by the appellant by making irrational assumptions and without providing any cogent reasons. 3. Levy of interest u/s 234B,234C and 234D: - That on facts and circumstances of the case and in law the Ld. Assessing Officer, erred in levying interest under section. 234B, 234c and 234D. 4. Levy of Penalty u/s. 271(1)(c):c- That on facts and circumstances of the case and in law the Ld. Assessing Officer, erred in proposing the initiation of t....
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....ed-off vide directions dated 30/10/2013. Pursuant to the said directions, final assessment order was passed on 03/12/2013 incorporating certain TP adjustments. Against this order, the assessee is under appeal before us. 4.4 The international transactions carried out by the assessee with its Associated Enterprises (AE) were referred to Ld. TPO for determination of Arm's Length Price (ALP). These transactions were in the nature of Import of raw material & finished goods, payment towards fee, exports of chemical additives and commission on customer service support activities. In assessee's TP study report, all these transactions were aggregated and benchmarked using entity level TNMM method. One of the transactions viz. export of chemical additives aggregated to Rs. 11206.20 Lacs. The assessee had exported 9 products to its various AEs. Similar products were sold to non-AE's in domestic as well as in export markets. Accordingly, Ld. TPO, observing the average rate of these products as sold to AE and non-AEs, concluded that there was difference in rates charged to AEs and non-AEs. This differential worked out to be Rs. 380.25 Lacs in 7 product categories, the computation of which ha....
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....t the change in method from TNMM to CUP method is not justified. Hence, we set aside the order of the Assessing Officer. Accordingly, the order of learned CIT(A) for A.Y. 2005-06 is upheld and the order of Assessing Officer pursuant to DRP direction for A.Y. 2006-07 and 2007-08 is set aside. As it could be observed that coordinate bench held that consistently applied TNMM method could not be disregarded without there being any change in any facts. Upon perusal of the said order and the case records, we find that facts are pari-materia the same in earlier AYs as well as in AY 2009-10. In this year also, the assessee's consistent TNMM methodology has been rejected by Ld. TPO without any sound basis. Although the principle of res-judicate are not applicable to Income Tax proceedings, however, the rule of consistency would debar the revenue to change its stand in difference assessment years without any sound basis, facts and circumstances being identical. The said proposition is well supported by the decision of Hon'ble Bombay High Court in the case of PCIT v/s. Quest Investment Advisors Pvt. Ltd. reported in [2018] 409 ITR 545 wherein it has been held that when a pri....
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....e Ld. DRP, the assessee contended that following consistent method of accounting, the differential interest was already offered to tax in next assessment years and therefore, there was no loss to the revenue. However, the said plea could not find favor with Ld. DRP who upheld the action of Ld. AO. 8.3 Before us, Ld. Sr. counsel explained that the tenure of the fixed deposits was spread over a period of 2 financial years. The interest income up-to 31/03/2010 was correctly estimated, accounted for in the books and offered to tax whereas the balance amount was already offered to tax in AY 2011-12. The same is in accordance with mercantile system of accounting being followed by the assessee. In this background, it was pleaded that the addition of Rs. 19.93 Lacs ought to be deleted as the same has already been offered to tax in AY 2011-12 and there would only be timing difference. 8.4 Upon perusal of final assessment order dated 29/08/2016 for AY 2012-13, we find that the assessee has already been granted credit of Rs. 35.83 Lacs, being excess interest income offered by the assessee during AY 2012-13. The same has been claimed on the plea that Ld. AO had added short income of Rs. ....