TaxTMI 
TaxTMI 
2022 (7) TMI 1408
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....nsfer pricing adjustment of Rs 1,28,51,051: Rejection of economic analysis undertaken by the Appellant On the facts and in the circumstances of the case and in law, the learned TPO/DRP: 2. erred in not appreciating that in respect of the international transactions under consideration, none of the conditions set out in Section 92C(3) of the Act are satisfied and therefore, it is incorrect to disregard the transfer pricing analysis carried out by the Appellant and re-determine the arm's-length price; 3. erred in aggregating the international transactions (i.e charter hire of dredgers and payment for subcontracted activity) of the Appellant for the purpose of Transactional Net Margin Method, disregarding the independent scientific transfer pricing analysis done by the Appellant for each transaction in accordance with Rule 10B of the Rules. Charter hire of dredgers On the facts and in the circumstances of the case and in law, the learned TPO / DRP: 4. erred in rejecting 'other method which has been considered as the most appropriate method in VODMC's transfer pricing study report and selecting transactional net ....
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....reseeable losses of INR 10,31,11,161 as a non-operating item and thereby computing the operating margins of the Appellant by adding back the reversal of provision and consider the correct operating margin of 46.64% of the Appellant by including write back of provision of foreseeable losses as an operating item; 14. erred in considering the payment towards allocation of head office (HO) expenses while computing the operating margins of the Appellant even though the same was disallowed by the Appellant in its computation of income to the extent of section 44C of the Income-tax Act, 1961 (the Act). 15. erred in considering the payment towards allocation of head office (HO) expenses while computing the operating margins of the Appellant even though the same has been in entirety disallowed by AO/TPO; 16. erred in computing the ALP without giving the benefit of 5 percent under the proviso to Section 92C(2) of the Act; 17. erred in selecting government company viz. Dredging Corporation of India as a comparable to the operations of the Appellant. 18. failed to consider the following comparables for the purpose of TNMM a) Afcons Infrastr....
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....connection with the enjoyment of the right property or information) 26. erred in not appreciating the fact that the crew members provided on dredgers by the Appellant is neither sharing of any experience and information concerning industrial, commercial and scientific knowledge and experience gathered over the years by the Appellant nor in furtherance of sharing such experience and information. 27. erred in not appreciating the fact that the reimbursement of salary received by the Appellant does not have any nexus with the management services rendered by it to VOIPL. 28. erred in not appreciating the fact the reimbursement of salary received by the Appellant was without any markup and constitute pure reimbursements which are not taxable as fees for technical services under the Act. Levy of surcharge and education cess On the facts and in the circumstances of the case and in law, the learned AO: 29. erred in levying surcharge and education cess on the income chargeable to tax under India- Netherlands DTAA; Levy of interest under section 234B of the Act On the facts and in the circumstances of the case and in law, the lea....
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....redgers and payment to associate enterprises for sub-contract of specified dredging activities using TNMM and aggregating these transaction. The TPO compared the operating margins of the assessee i.e- 9.98% with the margin of dredging corporation of India ltd i.e 0.95% and accordingly made an adjustment to the total income of the assessee. 4. The DRP vide direction dated 29.11.2016 stated that TPO found that price paid for international transaction has not been determined in accordance with sub-section (1) and sub-section (2) of Section 92C of the Act and held that the action of the TPO using TNMM and comparing margin of the assessee (-) 9.98% with margin of dredging Corporation of India Ltd. i.e 0.95% and making of an adjustment was in accordance with law. The TPO selected Dredging Corporation of India a Government Company as a comparable to the assessee whose margin was 0.95% and made adjustment after considering assessee's margin at (-)9.98%. 5. During the course of appellate proceedings before us at the outset the ld. Counsel submitted that identical issue on similar facts has been adjudicated by the coordinate bench of the ITAT, Mumbai, vide ITA No. 2029/Mum/2016 for A.Y....
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....r section 143(3) of the Act, the Assessing Officer, though, accepted the valuation as per VG Bouw norms, however, he made an adjustment on account of mobilization and de- mobilization period. 13. Interestingly, in the assessment year 2010-11, the assessee benchmarked the hire charges / lease rentals for charter hire of dredgers by applying the valuation certificate of the valuer as a CUP. However, in the course of proceedings before him, the Transfer Pricing Officer noticed that independent valuer has valued the hire charges by applying CIRIA norms of 2005. Therefore, the Transfer Pricing Officer vide letter dated 11th December 2013 called upon the assessee to value the charter hire charges of dredgers by applying the formula as per CIRIA Norms 2005. Ultimately, the Transfer Pricing Officer having found that charter hire charges paid by the assessee to the AEs is at arm's length as per CIRIA Norms 2009, made no further adjustment. It is relevant to observe, in case assessee's Indian subsidiary, viz, Van Oord India Pvt. Ltd., the Transfer Pricing Officer has consistently accepted the benchmarking of charter hire charges as per valuation done on the basis of VG Bouw / CI....
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....pertaining to tax for different assessment years because res judicata applies to debar Courts from entertaining issues on the same cause of action whereas the cause of action for each assessment year is distinct. The Courts will generally adopt an earlier pronouncement of the law or a conclusion of fact unless there is a new ground urged or a material change in the factual position. The reason why Courts have held parties to the opinion expressed in a decision in one assessment year to the same opinion in a subsequent year is not because of any principle of res judicata but because of the theory of precedent or the precedential value of the earlier pronouncement. Where facts and law in a subsequent assessment year are the same, no authority whether quasi judicial or judicial can generally be permitted to take a different view. This mandate is subject only to the usual gateways of distinguishing the earlier decision or where the earlier decision is per incuriam. However, these are fetters only on a coordinate bench which, failing the possibility of availing of either of these gateways, may yet differ with the view expressed and refer the matter to a bench of superior strength or in ....
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....management fee received by the assessee is neither in the nature of royalty nor fee for technical services as per Article-12 of India-Netherland Tax Treaty. Thus, he submitted, the issue is covered by the decision of the Tribunal. 23. The learned Departmental Representative, though, agreed that the issue has been decided in favour of the assessee, however, he relied upon the observations of learned DRP and the Assessing Officer. 24. We have considered rival submissions and perused the material on record. It is evident from the order of learned DRP that they have decided the issue relying upon their decision in assessee's own case for the assessment year 2009-10. Notably, while deciding assessee's appeal for the assessment year 2009-10 in ITA No.7589/ Mum./2012, dated 7th October 2016, the Tribunal has held that the amount received is neither in the nature of royalty nor fees for technical services under Article-12 of India-Netherland Tax Treaty. That being the case, respectfully following the decision of the Co-ordinate Bench referred to above, we delete the addition made by the Assessing Officer." It is also submitted that issue of taxability of salary receive....