TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 1408
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....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 margin method without providing cogent reasons for the same and simply relying on last year's DRP ....
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....ating 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 Infrastructure Limited b) International seaport dredging c) KND Engineering Technologies Ltd. d) Krishna Bhagya Jala Nigam Ltd e) L&T Sapura Offshore Pvt Ltd f) Seamec Ltd g) Stewarts & Lloyds of India Limited Taxab....
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....pellant 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 learned AO: 30. erred in levying interest under section 234B of the Act to the Appellant, being a non resident company, without appreciating the fact that the Hon'ble Supreme Court in the Appellant's own case has dismissed the Special Leave Petition filed by the Department for levy of interest under section 2348 of the Act. Incorrect computation of interest under....
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....t 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. 2011-12 dated 31.03.2019. On the other hand the ld. Departmental Representative placed reliance on the decision of lower authorities. With the assistance of the ld. Representatives we have perused the decision of ITAT, Mumbai, as referred supra, the relevant part of the decision is reproduced as under: "11. We have considered rival submissions and perused the material on record. As could be seen from the fa....
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....s 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 / CIRIA Norms, which is evident from the orders passed by the Transfer Pricing Officer for the assessment year 2011-12, a copy of which is placed in the paper book. 14. Interestingly enough, out of 10 dredgers hired by the assessee for the impugned assessment year, two dredgers were partly hired by the aforesaid Indian subsidiary and in the course of proceedings under section 92CA(3) of the Act, the Transfer Pricing Officer has accept....
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.... 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 some cases to a bench of superior jurisdiction." 16. The same view has been expressed in other decisions as well. In case of the present assessee also, the material facts permeating through different assessment years are more or less identical as the terms and conditions on which the dredgers are hired have not changed. That being the case, applying the rule of consistency, a different view cannot be taken in the impugned assessment year with regar....
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....sed 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 received was also covered in favour of the assessee by the decision of the ITAT, Mumbai, in the case of the assessee itself as referred supra in this order. The relevant part of the operating para is reproduced as under: "25. In grounds no. 20, 21 and 23, the assessee has challenged the addition made on account of reimbursement of salary by treating it as fees for technical services. 26. The Assessing Officer in the course of assessment proceedings, held that the reimbursement of salary is in the n....