TaxTMI 
TaxTMI 
2022 (2) TMI 1337
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..... 3. The details of Specified Domestic Transactions entered during the year were as follows: Sl.No. Specified domestic transaction Amount (Rs.) Most appropriate method Remarks 1 Purchase of Raw Materials 12,29,33,814 CUP Method The purchase of raw materials by assessee from Nutrikraft India Pvt Ltd (NIPL)is at same price as purchased by NIPL from third parties. 2 Purchase of Finished Goods 155,56,30,968 TNMM The assessee has considered its elated party NIPL as a tested party for trading segment. The margin earned by NIPL is lower when compared to margin earned by 3rd parties and therefore purchase price of the assessee is at arm's length. 3 Managerial Remuneration 6,72,99,383 Other Method The remuneration is commensurate with the qualification, experience, expertise of the directors and hence considered as at arm's length 4 Reimbursement of expenses 8,99,95,940 Other Method Reimbursements are at cost and therefore at arm's length. With respect to purchase of finished goods, the assessee in its TP study had selected NIPL as tested party. This was for the reason that database do not contain any companies, which are engaged in trading of animal feeds a....
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.... Baramati Cattle feeds Pvt. Ltd. 9.70 Average 7.63 8. The TPO adopted entity level figures to make TP adjustment. The revised adjustment computed by TPO was as below : Particulars Formula Amount (in Rs.) Taxpayers operating revenue OR 2,53,29,55,927 Taxpayers operating cost OC 2,60,76,39,391 Taxpayers operating profit OP -7,74,82,813 Taxpayers PLI PLI=OP/OC -3.06% Average Margin of comparable set M 7.63% Arm's Length Price ALP=(1-M)*OR 233,96,91,380 Total operating cost OR 2,60,76,39,391 Shortfall being adjustment ALP-OC 26,79,48,011 9. The addition as above was made to the total income of the assessee in the final Assessment Order by the AO against which the assessee has preferred the present appeal before the Tribunal. 10. We shall take up for consideration ground No.4 raised by the assessee as a preliminary ground as it goes to the root of the additions made under section 92BA of the Act. Ground No.4 reads as follows: "4. The lower authorities have erred in not appreciating that section 92BA(i) of the Act is omitted, without any saving clause by Finance Act 2017, which has retrospective effect as....
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....n 80-IA are applicable; or (vi) any other transaction as may be prescribed, and where the aggregate of such transactions entered into by the assessee in the previous year exceeds a sum of twenty crore rupees. Section 92(2), as amended provided that where in an international transaction or specified domestic transaction, two or more associated enterprises enter into a mutual agreement or arrangement for the allocation or apportionment of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any one or more of such enterprises, the cost or expense allocated or apportioned to, or, as the case may be, contributed by, any such enterprise shall be determined having regard to the arm's length price of such benefit, service or facility, as the case may be.Section 92(2A) provided that any allowance for an expenditure or interest or allocation of any cost or expense or any income in relation to the specified domestic transaction shall be computed having regard to the arm's length price. 14. In terms of the above statutory provisions of Sec.92BA(i) the transactions in question are to b....
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....he very same case of Texport Overseas Pvt. Ltd. in ITA No.392/2018 order dated 12.12.2019, with the following observations:- "5. Having heard learned Advocates appearing for parties and on perusal of records in general and order passed by tribunal in particular it is clearly noticeable that Clause (i) of Section 92BA of the Act came to be omitted w.e.f. 01.04,2019 by Finance Act, 2014. As to whether omission would save the acts is an issue which is no more res-intigra in the light of authoritative pronouneenient of Hon'ble Apex Court in the matter of KOBLAPUR CANESUGAR WORKS LTD. v. UNION OF INDIA reported in AIR 2000 SC 811 whereunder Apex Court has examined the effect of repeal of a statute visa-vis deletion/addition of a provision in an enactment and its effect thereof. The import of Section 6 of General Clauses Act has also been examined and it came to be held: "37. The position is well known that at common law, the normal effect of repealing a statute or deleting a provision is to obliterate it from the statute-book as completely as if it had never been passed, and the statute must be considered as a law that never existed. To this rule, an exception is engrafted by t....
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.... first substantial question of law raised in the appeal by the revenue in respective appeal memorandum could not ITA No.2936/Bang/20180 M/s. Sobha City, Bangalore arise for consideration particularly when the said issue being no more res Integra." 16. Since the decision rendered by the Hon'ble High Court of Karnataka is binding on this bench of Tribunal sitting in Bengaluru, we follow the same. Accordingly, we hold that the reference to the TPO in respect of specified domestic transactions mentioned in clause (i) of sec.92BA is not valid, as the said provision has been omitted. Accordingly, we direct the AO to delete the addition relating to specified domestic transactions made u/s 92CA of the Act. 17. We however notice that the co-ordinate bench in the case of Textport Overseas (supra) has restored the matter to the file of the A.O. with the direction to examine the claim of expenditure in accordance with the provisions of section 40A(2) of the Act. Following the same, we restore this issue to the file of the AO with the direction to examine the claim of expenditure mentioned above in terms of the provisions of section 40A(2) of the Act. Accordingly, following the binding d....
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....vided PAN of KS Enterprises. The DRP directed the AO to delete the necessary additions after verifying the genuineness of KS Enterprises & Manoj Traders. 20. Pursuant to the aforesaid direction of the DRP, the AO before passing the impugned order issued notice u/s 142(1) of the Act dated 19.04.2021 to the assessee requesting details of KS Enterprises & Manoj Traders. Against this, the assessee vide response dated 21.04.2021 (Pg 854-855 of Paper Book I) filed the following details: Name of the Party Supportings Reference KS Enterprises Copy of Ledger extract Pg 856-857 of Paper Book-I Copy of Confirmation Letter Pg 359 of Paper Book-I Bank Statements Pg 860-875 of Paper Book-I Purchase register along with sample invoices Pg 876-878 of Paper Book-I Manoj Traders Copy of Ledger extract Pg 858-859 of Paper Book-I Copy of Confirmation Letter Pg 361 of Paper Book-I Bank Statements Pg 860-875 of Paper Book-I Purchase register along with sample invoices Pg 876-878 of Paper Book-I 21. However, the AO without making any reference to the above evidence filed by the Assessee, passed the final assessment order making additio....