TaxTMI 
TaxTMI 
2023 (2) TMI 189
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....circumstances of the case and in law, the Learned Assessing Officer (AO)/Hon"ble Dispute Resolution Panel (DRP)/ Transfer Pricing Officer (TPO)(as the case may be) erred in - 1.1 Passing the order U/s. 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (the Act) making huge additions and disallowances on the basis of surmises, conjectures, presumptions and assumptions and without considering the papers and documents submitted as also submission jade during the course of assessment proceedings and the proceedings before the Hon"ble Dispute Resolution Panel. 1.2 Passing the impugned order which is illegal and bad in law and consequently, null and void. 2. Transfer Pricing Issues: 2 On the facts and circumstances of the case and in law, the learned Assessing Officer (AO)/ Hon"ble Dispute Resolution Panel (DRP)/ Transfer Pricing Officer (TPO)(as the case may be) erred in- 2.1 Not upholding the alternate objection of the appellant that the learned AO did not satisfy himself about the necessity and requirement of referring the matter for determination of arm"s length price in respect of the international transaction between the appellant and the AEs and hence, hence the referen....
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.... method as most appropriate method for determining the arm"s length price of the international transaction ,without appreciating that the purported use of CUP data was not appropriate in terms of Rule 10B(2) and 10B(3) of the Rules. (C) Cherry Picking Without prejudice to above, on the facts and in the circumstances of the case, and in law, the Learned TPO erred and the Hon"ble DRP further erred in not considering that in case CUP method is considered as most appropriate method, the information of the raw material procured by other companies including USV, Intas and Torrent Pharma should also be called by using the powers under section 133(6). (d)Non consideration of commercial and economic circumstances The Ld DRP and consequently the Ld. AO erred in confirming the TPO"s action of selecting and application of the CUP method as the most appropriate method without appreciating the Appellant"s commercial rationale and economic circumstances that the import of raw material from the AE was in relation to the use of trademark "Concor 5" licensed from the AE. (e) Consider the same/similar geographic market Without prejudice to above, on the facts and in the circumstances of t....
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....sue was elaborately discussed in the previous years and the additions made in the case of the appellant were sustained and following, the directions of the Hon. DRP in assessment year 2006-07, 2007-08, 2009-10 and 2010-11. (ii) not following the directions of the Hon. Income Tax Appellate Tribunal in appellant"s own case in respect of assessment year 2003-04 wherein, it has been directed that upon furnishing the details, i.e. names, addresses of the Doctors to whom the samples order of the Hon. Income Tax Appellate Tribunal was brought to the notice of the Hon. DRP/ Ld. A.O. (iii) disregarding the details furnished as regards the names, address and quantities distributed for the entire year in the CD format and not verifying the details submitted to him by issuing the notice u/s. 133(6) as mentioned to him by and wrongly stating that he could not carry out so called independent investigation of the samples distributed. (iv) without prejudice to the above and in the alternate not allowing the said expenditure as "trading loss" since there was no doubt that the stocks were manufactured by the company on which excise duty is paid and the said items were not lying with the compan....
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....e facts and in the circumstances of the case and in law, the Hon"ble DRP erred in deleting the addition on account of disallowance u/s. 2(24)(x) r.w.s. 36(1) of the Act by holding that provisions of Section 43B of the Act are applicable without appreciating the fact that the issue was not governed by the provisions of section 43B of the Act in view of the CBDT"s Circular No. 22/2015 dated 17.12.2015. 3. The appellant prays that the Directions of the Ld. DRP-1, Mumbai on the above grounds be set aside to the file of the AO or confirm the order of the AO." 04. The brief facts of the case shows that assessee is a company engaged in the business of manufacturing of pharmaceutical. It is subsidiary of Merk Group, Germany. 05. It filed its return of income on 29.11.2011 declaring income of Rs. 105,73,75,060/-. The return of income was picked up for scrutiny. 06. The ld. Assessing Officer noted that assessee has entered into 8 different kind of international transactions. The AO referred the matter to the ld. TPO for examination of arm"s length price of those international transactions. The TPO noted that assessee has entered into international transactions of purchase of raw materia....
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....as determined at Rs. 33,086 Per.Kg. It was applied on total quantity consumedof 407.30Kg and thereafter adjustment of Rs. 93,28,708/- was made to the international transaction of import of material. 09. The assessee has also paid technical consultancy Rs. 3,30,90,000/- which was also benchmarked using TNMM method. The assessee paid the above fees for support of engineering of production and quality control, training, advising, etc. It was a fixed fee of Rs. 3,00,00,000/- Per Annum plus applicable taxes. The ld. TPO asked the assessee to satisfy whether the services have been rendered or not. On the basis of the documents submitted by the assessee, the ld. TPO held that he needs to makea reasonable estimate of whatever services rendered by the associated enterprises. He estimated the actual use of 100 hours Per month, adopted rate of Rs.2500 per hour and therefore, he estimated the arm"s length price of such service at Rs.30,00,000/- in a year. Accordingly he made an adjustment of Rs.3,03,90,000/- on the international transaction of Rs. 3,30,90,000/-. Accordingly, the order u/s. 92CA(3) of the Act was passed on 12.01.2015 proposing the total adjustment at Rs. 3,97,18,708/-. 010. B....
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....ing, the ld. Authorized Representative submitted that for A.Y. 2009-10 and 2010-11 the order of the co-ordinate bench dated 31.03.2016 wherein the Hon"ble Bombay High Court in its order dated 16.09.2019 in Question No. 2(b) the deletion of the adjustment on account of payment of technical fees aggregated with other international transaction and applying TNMM was upheld. We also find that for A.Y. 2003-04 this issue is decided in favor of the assessee. In view of the above judicial precedent available in favor of the assessee on identical facts and circumstances of the case, we do not find any infirmity in the direction of the ld. Dispute Resolution Panel in deleting the adjustment of Rs.3,03,90,000/- on account of technical consultancy fees. Thus, Ground No. 1 of appeal of AO is dismissed. 015. The Ground No. 2 of the appeal is against deletion of addition in respect of disallowance u/s. 2(24)(x) r.w.s. 36(1)(va) of Rs.92,158 being late payment of employees contribution to the credit of respective authorities. We find that now this issued is squarely covered against the assessee by decision of the Hon"ble Supreme Court in case of Checkmate Services Private Limited Vs. CIT (2022) 1....
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....ssessee for A.Y. 2009-10, 2010-11 where the issued has been discussed elaborately. Therefore, according to him there is no reason to deviate from that order. He vehemently submitted that even the judicial discipline demands that the ITAT must follow the order of the Bench. 020. We have carefully considered the rival contention and pursued the orders of the lower authorities. We find that identical issue arose in the case of the assessee for A.Y. 2009-10, 2010-11 and ITA No. 4926/MUM/2014 for A.Y. 2009-10 wherein for order dated 31.03.2016 has upheld the applicability of CUP Method, confirming the rejecting of TNMM as the most appropriate method. The co-ordinate Bench also considered the reasonable quantity of 20kg only. In view of this, principally Co-ordinate Bench decision in respect of the assessee is required to be followed. The Co-ordinate Bench in Para No. 15 it also agreed with the simple average of the prices. The Coordinate bench 2016] 69 taxmann.com 45 (Mumbai ) in case of assessee deserves to be followed. 021. The assessee has contended that if the order of the co-ordinate Bench A.Y. 2009-10 is followed. The simple average works out to be Rs.47,772 Per.kg. and it will ....