2022 (2) TMI 1361

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....08-09. It is submitted that the assessee filed its return on 30.11.2012 declaring a loss of Rs. 5,85,01,761/- under the normal provisions of the Act. In the course of assessment proceedings, the Assessing Officer made a reference u/s 92CA(1) to the Transfer Pricing Officer and the assessee complied with the notice issued by the TPO by filing necessary information. The Ld. Counsel submits that during the financial year under consideration the assessee undertook following international transactions with its AEs, which were duly reported in Accountant's Report (Form No. 3CEB) filed along with return of income: - 3. Ld. Counsel submits that in order to bench mark its international transaction in the course of assessment proceedings the assessee conducted fresh search and arrived at a set off comparables. The Ld. Counsel submits that TPO insisted that depreciation adjustment should be carried out on profit margins of comparables and not the assessee company. Therefore, the depreciation and working capital adjusted margins were furnished for the following fresh search comparables:- 4. The Ld. Counsel submits that assessee earned net operating margin of Rs. (-1.07)% without depreciati....

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....ITA No. 1282/Bang/2011 8. Bekaert Industries (P) Ltd. vs. DCIT, ITA No. 146/Pun/2014 & 171/Pun/2014 9. Market Tools Research (P) Ltd. vs. ACIT, ITA No. 2066/Hyd./2011 10. Srini Pharmaceuticals Ltd. vs. ACIT, ITA No. 1851/Hyd./2012 6. The Ld. DR referring to para 14 of page 34 of the DRP submitted that it is the finding of the DRP that in the preceding previous year the claim of the assessee for depreciation adjustment was rejected by the DRP. Therefore, the Ld. DR submits that the Ld. TPO has rightly rejected the claim of the assessee for depreciation adjustment. 7. We have heard the rival submissions perused the orders of the authorities below and the decisions relied upon. From the record placed before us, we observe that the claim for depreciation adjustment was allowed to the assessee by the DRP for the AY 2013-14 in its directions dated 22.09.2017. However, it is the finding of the DRP for the assessment year under consideration in its directions dated 18.11.2016 is that in the preceding previous year relevant to AY 2011-12 the claim of the assessee for depreciation adjustment was denied by the Ld. TPO and this was upheld by the DRP. We have also gone through the jud....

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....Paper Book Part III. The Ld. Counsel further submits that this company is affected by a peculiar abnormal circumstance as this company entered into Joint Venture Agreement (JVA) during the year under consideration with Fiat Group Company. Ld. Counsel submits that profitability of this company has been impacted by Joint Venture. Further some of the existing production equipment was also transferred to the New Joint Venture Company. Therefore, it is contended that this company should be excluded from comparables. Reliance was placed on the following decisions: - 1. M/s Adoptic India Pvt. Ltd. Vs. ITO 54 taxmann.com 55 (Hyderabad Trib.). 2. Capital IQ Information Systems (India) Pvt. Ltd. vs. DCIT 32 taxmann.com 2 (Hyderabad Trib.). 3. Ameri Prise India Pvt. Ltd. vs. DCIT 53 taxmann.com 136 (Delhi Trib.). 14. On the other hand, the Ld. DR strongly placed reliance on the orders of the DRP. 15. Heard rival submissions, perused the orders of the DRP and the material placed before us. Coming to Uniklinger Ltd. we have perused the annual report of the company which is placed at pages 971 to 1008 of the compilation. In the notes to financial statements for the year ended 31.03.201....

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....ny from the comparables. 21. Coming to ground nos. 4.11 and 4.12 the Ld. Counsel for the assessee submitted that the TPO excluded KMA Auto Components P. Ltd. and ANU Industries Ltd. from the list of comparable companies for the reason that annual reports/P&L Accounts are not available. The Ld. Counsel for the assessee submits that the DRP accepted the contention of the assessee that the annual reports are available in public domain but rejected the comparables on functional comparability. The Ld. Counsel for the assessee submits that the TPO never objected on functional comparability but excluded on the ground that annual reports are not available. The Ld. Counsel for the assessee further submits that functional comparability of these comparables was established by the assessee before the TPO as well as the DRP. The Ld. Counsel for the assessee submits that both these comparable companies KMA Auto Components Pvt. Ltd. and ANU Industries Ltd. are engaged only in the business of manufacturing of Auto Components. Ld. Counsel submits that ANU Industries Ltd. is manufacturing ignition coils, actuators, relay assembly starters, relays etc. for cars and two wheelers. As per their web si....