TaxTMI 
TaxTMI 
2020 (11) TMI 740
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.... stated, the assessee, a resident company, is engaged in the business of manufacturing of various types of process gas compressors including reciprocating compressors. As stated by the Assessing Officer, the assessee also supplies parts and provide services to the oil and gas sectors where its compressors are used. The assessee had entered into a cost contribution agreement with its AE Dressers-Rand Group Inc. USA under which certain services were rendered to the assessee. Towards rendering of such services, the assessee paid an amount of Rs. 4,44,07,733/- during the year to the AE. The Transfer Pricing Officer (TPO) while examining the arm's length nature of such transaction ultimately concluded that the arm's length price (ALP) of such transaction has to be determined as ''Nil''. Accordingly, he made adjustment of the entire amount of Rs. 4,44,07,733/-. The learned DRP after considering the submissions of the assessee allowed 50% of the amount paid. In other words, learned DRP determined the ALP of the cost contribution charges paid to AE at Rs. 2,22,03,867. Before us, Shri Nitesh Joshi, learned Counsel for the assessee submitted that for settling the disp....
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....price charged by the assessee to the AEs towards provision of field services after allowing discount to be at arm's length. In this context, we reproduce the observations of the Tribunal hereunder:- 11. The next adjustment of Rs. 4,70,000, on the ground that the assessee ought not to have allowed discount of 10% to AEs, is also equally devoid of any merits. We have noted that the assessee has followed the TNMM for determination of ALP and the Assessing Officer has not even disputed TNMM being most appropriate method on the facts of this case. The question of applying CUP, even if that be so, can only arise when TNMM is rejected. Even under CUP method, it is not necessary that all sales must take at the same price. There can always be variations of prices for the same product or services on valid grounds, such as quantum of business, risk factors, marketing efforts needed etc. When assessee is dealing with an AE, at least there are no commercial risks, no marketing costs and there could be several other factors as well justifying a normal discount as the assessee could indeed go to many important customers. It hardly needs to be emphasized that even in independent busin....
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.... submitted, identical issue arising in assessee's own case in preceding assessment years has been restored to the Assessing Officer. He submitted, similar view may be taken in the impugned assessment year as well. 14. The learned Departmental Representative agreed with the aforesaid submissions of the assessee. 15. Having considered rival submissions, we find that while deciding identical issue in assessee's own case in AY 2007-08 in ITA No. 5412 and 5435/Mum/2014, dated 10/08/2020, the Tribunal has restored the issue to the Assessing Officer observing as under:- 5.4 As rightly pointed out by Ld. AR, we find that Tribunal in assessee's own case for AY 2006-07, ITA No. 8753/Mum/2010 order dated 07/09/2011 followed its earlier order for AY 2001-02 dated 07/02/2008 and vide para 20, remitted the matter back to the file of Ld. AO for redoing the computation in accordance with order for AY 2001-02. Facts being pari-materia the same, we restore the matter back to the file of Ld. AO on similar lines to redo the computations in accordance with earlier years as per the directions of the Tribunal. Resultantly, this ground stand allowed for statistical purposes. ....
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....s on account of difference in income shown as per books of account and income received as per AIR information. However, it is the specific case of the assessee that during the year under consideration, it had no dealings with Century textiles and Industries Pvt. Ltd. and Uttar Gujarat Vij Company Ltd. On perusal of facts on record, we find that aforesaid claim of the assessee has not at all been enquired into by the Assessing Officer by making enquiry with the concerned parties. Further, assessee's contention that during the year under consideration invoices of Rs. 51,050/- was raised on Eastern Electrolysers Ltd. has not at all been enquired into by the Assessing Officer. When the assessee has furnished evidence to reconcile the difference and claims that there is no such income was earned by it, the Assessing Officer was duty bound to make proper enquiry to ascertain the correctness of assessee's claim. Without making any enquiry, the Assessing Officer cannot make the additions. More so, when the assessee has disclosed huge turnover and has also offered substantially high income. That being the case, it cannot be expected that the assessee would not disclose such a petty ....
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.... dismiss these grounds as not pressed. 30. Issue raised in ground no. 5 is identical to the issue raised in ground no. 5 and 6 of ITA No. 7723/Mum/12. Following our discussions and decision therein, we delete the addition of Rs. 10,80,065/-. The balance addition of Rs. 5,38,937/- is sustained as it is covered under MAP proceedings. This ground is partly allowed. 31. Issue raised in ground no. 6 and 7 are identical to ground no. 7 of ITA No. 7723/Mum/2012. Considering the submission of learned counsel for the assessee that the assessee has no grievance as such, as, the Assessing Officer has not made any disallowance in the final assessment order, these grounds are dismissed as not pressed. 32. In ground no. 8, assessee has challenged the addition made of Rs. 2,91,32,770/- on account of adjustment of unutilized CENVAT credit to closing stock. This ground is identical to ground no. 8 of ITA No. 7723/Mum/2012. Following our decision therein, we restore the issue to the Assessing Officer with similar direction. 33. In ground no. 9 the assessee has challenged addition of Rs. 1,12,423/- on account of AIR information. 34. We have heard the parties and perused the material av....