TaxTMI 
TaxTMI 
2023 (7) TMI 648
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....he provisions of Section 92CA read with section 143(1) of the Act and defying the principles of natural justice by not granting any opportunity of being heard to the Appellant; 1.2 not following the directions of Hon'ble DRP and violating the provisions of Section 144C(10) read with Section 144C(13) of the Act, thereby rendering the assessment proceedings bad and invalid in law. 2. On facts and in law, the Ld. AO/Ld. TPO erred in incorrectly computing the proportionate adjustment. 3. On facts and in law, the Ld. AO/Ld. TPO erred in selecting companies which are not comparable to the Appellant in terms of their functions performed, assets owned, risks assumed as well as excluding Kaycee Industries Limited from the comparables set that has similar functional profile as that of the Appellant. 4. Without prejudice to Ground 3 above, the Ld. AO/Ld. TPO erred in not considering G.G. Engineering Limited as a comparable as demonstrated by the Appellant during the proceedings before the Hon'ble DRP. 5. On facts and in law, the Ld. AO/Ld. TPO erred in incorrectly computing the net cost-plus margins of the comparable companies selected by the L....
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....ffered to tax in the previous year. 10. On the facts and in law, the Ld. AO has erred while computing the tax liability for the year by considering credit of tax deducted at source ('TDS") of INR 30,934,615 instead of INR 31,476,859. General Grounds 11. On the facts and in law, the Ld. AO has erred in levying interest under section 234A, 234B, 234C and 234D of the Act in the assessment order of AY 2017-18 12. On facts and in law, the Ld. AO has erred in initiating penalty proceedings under section 274 read with section 270A of the Act." 2. Ld. Counsel of the assessee submitted that he shall not be pressing grounds pertaining to Corporate Tax Matters mentioned in ground nos. 9 and 10. Hence, these grounds are dismissed as not pressed. 3. Brief facts of the case are that Rockwell Automation India Pvt. Ltd. was incorporated on June 29, 1983 to design, manufacture, install, maintain, repair and deal in industrial, electrical and electronic products such as ICAM Systems/PLC Systems, Static/Frequency Converters, Operator Interface, Terminal Blocks and Contactors. The Company also designs, develops and installs software for operating ICAM Systems ....
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....RP-2, New Delhi u/s 144C of the Act and have reduced the transfer pricing adjustment from Rs. 25,49,73,168/- to Rs. 18,02,78,879/- for AY 2017-18. 4. The first ground pressed by the ld. Counsel of the assessee is with regard to aggregation to distribution segment with that of assembly segment. Ld. Counsel has summarized his submissions as under :- "Ld. TPO made an adjustment of INR 179,613,231 w.r.t. assembly and manufacturing segment by aggregating the results of distribution segment while carrying out such adjustment. While aggregating the transactions of two different class having different FAR, no opportunity was provided by the TPO. Various instances cited in the table below clearly evidence the approach of Ld. TPO in aggregating distribution segment with assembly/ manufacturing segment to implement the adjustment. Inconsistent with TPO's own position in the previous year (AY 2016-17) Adjustment carried out only in assembly/ manufacturing segment; no adverse inference drawn in the distribution segment (in fact never in the history of Appellant's operations, any adverse inference has been drawn in distribution segment) Refer page 693 of mer....
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....he Ld. TPO has erred in aggregating the result of distribution segment with assembly / manufacturing segments. This was inconsistent with TPO's own position in the previous year wherein adjustments was carried out in the assembly / manufacturing segments and no adverse inference has been drawn in distribution segment. Furthermore, in the TPO's show cause notice when the adjustment was proposed, there was no mention of such aggregation. Moreover, the TPO has considered the manufacturing segments to make the adjustments. Further, the assessee has submitted that it has brought to the TPO's attention that the FAR of the assessee under the assembly and distribution segments are totally justified. For assembly, the assessee has set up a full scale assembly facility, including, deployment in the plant & machinery, land, building and other tangible assets. Whereas in the case of import of finished products, products are sold to third party customers without making any value-addition and the assessee primarily engages in activities of storage and distribution. 5.1 In our considered opinion, the submission of the assessee is justified that the AO has wrongly aggregated the assembly segmen....