2023 (7) TMI 997

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....eciating the fact that in the TP Study report, the assessee had benchmarked its transactions using two segments namely manufacturing and indenting but during the TP proceedings, it separated the losses from solar test, arbitrarily to present better margins under manufacturing segment? 2. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was justified in directing to allow the set off of brought forward unabsorbed depreciation for A.Y. 1999-2000 and 2000-01 against incomes of A.Y. 2010-11 in contravention of the pre-amended provisions of section 32(2) of the Act applicable period of 8 years immediately succeeding the assessment year for which such depreciation allowance was first computed got expire in A.Y.....

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....er Pricing Officer (TPO)/A.O., assessee filed objections before the DRP. Vide its letter dated 27th November 2014 DRP issued directions under Section 144C(5) of the Act. Pursuant thereto, the A.O. completed the assessment under Section 143(3) read with Section 144C(13) of the Act determining the income of the assessee at Rs. NIL under normal provisions and book profit of Rs. 9.21 Crores. 5. The TPO after considering the material before him determined the Profit Link Indicator (PLI) of Operating Profit (OP)/Operating Cost (OC) at 25.83%. Accordingly, an adjustment amounting to Rs. 10.26 Crores was proposed in the manufacturing segment. 6. Assessee in its objections before the DRP contended that the TPO was wrong in including the solar ....

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....fitable solar receiver tubes production which is a component of concentrated solar power plant. The solar trial test business did not take off the way the company expected and therefore assessee decided to discontinue the solar trial test activity and decided to provide for impairment of the assets used for solar trial activity considering no use in near future. 8. While going through the Transfer Pricing Study Report, the TPO found that (i) assessee had benchmarked its transaction after segmentalizing the activities into manufacturing and indenting, i.e., there were only two segments as per segmental accounting and (ii) Assessee, however, while computing the margin (PLI) had divided the segmental accounting into three parts, that ST had....

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....ss and the company had made provision for impairment of assets of Rs. 13.90 Crores as per Accounting Standard 28. The DRP also noted that in the Annual Accounts it is noted that the expenses for ST activity were exceptional. The DRP therefore directed TPO to exclude losses in solar trial run up in computing the PLI of manufacturing segment. The DRP also held that the expenses/income under the head non-operating transactions had to be excluded for arriving at the correct PLI. This has been upheld by the ITAT. 11. As held by the Hon'ble Apex Court in Apollo Tyres Ltd. (supra) the A.O. has to accept the authenticity of the accounts. It is not a case of the A.O. that the accounts of assessee have not been scrutinized or certified by statutor....