TaxTMI 
TaxTMI 
2023 (4) TMI 284
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for short) dated 24/10/2017 by the DCIT, Circle 16(2), New Delhi. 2. The assessee has raised the following substantive grounds of appeal:- "A. GENERAL GROUNDS 1. Order passed by Ld. (IT (A) dated 28.06.2019 is a vitiated order as Ld. (IT (A) erred both on facts and in law in confirming additions made by the Ld. AO/Ld. Transfer Pricing Officer ("TPO") to the Appellant's income by issuing an order without appreciation of facts and law. 2. That Ld. (IT (A) erred in confirming the income of the Appellant at Rs.15,24,58,920/- as against the returned income/loss declared by the Appellant at Rs. (1,85,56,288) by sustaining an addition of INR 17,10,15,208/-, being the transfer pricing adjustment, by holding that M....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... their business cycle and therefore, for a correct comparability suitable price penetration adjustment has been made. 4. Without prejudice to above grounds, Ld. CIT (A) has grossly erred both on facts and in law for: 4.1. Confusing the comparable adjustments made by Appellant while computing PLI with suo-moto adjustment to control transactions. 4.2. Disregarding the fact that where comparability adjustment is not allowed even then impact of comparability adjustment have to be on ALP not on income of the Appellant. 4.3. Disregarding the fact that where comparability adjustment is not allowed even then the ALP determined based on comparables is within the range of control transaction thus requiring no adjus....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1 Import of raw materials and finished goods 249,487,767 Transactional Net Margin Method ('TNMM') Operating Profit ("OP") Operating Revenue ("OR") 2 Availing of engineering support services 2,064,967 3 Availing of technical assistance 1,071,943 4 Payment of guarantee fee 769,421 5 Interest payment 122,834 6 Reimbursement of salary to A.Es 36,346,371 Other Method ('OM') Not Applicable 7 Reimbursement of expenses to AEs 1,792,682 8 Reimbursement of expense....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... subsequently, vide draft assessment order dated 15th December, 2016, informed assessee that an addition of INR 17,10,15,208 was to be made to assessee's total income. However, since the assessee did not exercise its option of filing its objections before the DRP the AO proceeded to finalise assessment order upholding the adjustment made by the Ld. TPO. The final assessment order dated January 24, 2017 was passed under Section 143(3)/144C(3) r.w.s 92CA(3) of the Act at an assessed income of INR 15,24,58,920/- [addition on account of Transfer pricing adjustment). 5. Aggrieved by the final assessment order dated 24/01/2017 the assessee preferred an appeal before the CIT(A). The Ld.CIT(A) vide order dated 28/06/2019, confirmed the incom....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eard the parties and perused the material available on record. In the present case there is no dispute regarding the methods and margin adopted for bench marking the international transactions, the only dispute is of ad-hoc adjustment made by the TPO. The TPO had accepted the methods and margin however, treated price penetration adjustment claimed by the assessee as income of the assessee. The assessee has provided a table to demonstrating the outcome of the bench marking with and without adjustment made by the assessee. s N Particulars Mitsui Prime Comparabl e Comments 1. Without Ad-hoc Adjustment i.e. Price Penetration Adjustment Origina....