TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 749
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..../08/2013. Subsequently, due to change in the incumbent another notice u/s. 143(2) r.w.s 129 of the Act was issued on 16/09/2015. In response to the notices, the assessee's Authorized Representative appeared from time to time and furnished the information called for. The Ld. AO during the course of the assessment proceedings found as per the Form 3CEB that the assessee-company has entered in to international transactions with its Associated Enterprises [AEs] as detailed below: Nature of transaction Amount (Rs) Export of finished goods 32,00,34,704 Receipt towards share capital 20,85,23,730 Receipt towards share premium 41,70,47,460 Receipt of share application money pending allotment 3,05,49,207 Total 97,61,54,921 Since the international transactions with its AEs exceeded the limits prescribed, a reference was made to the Addl. Commissioner of Income Tax (Transfer Pricing), Hyderabad on 20/10/2014 after obtaining the due approval of the Commissioner of Income Tax-1, Visakhapatnam. Accordingly, the Ld. Transfer Pricing Officer [TPO] passed the order u/s. 92CA(3) of the Act on 29/01/2016 by making upward adjustment of Rs. 12,88,76,471/- as detailed below: Operating Reve....
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.... prejudicial to the appellant, is arbitrary, contrary to law, facts and circumstances of the case and liable to be quashed. 2. That on the facts and circumstances of the case, the Ld. DRP and the Ld.AO erred in upholding the approach of the Ld. TPO and the consequent adjustment of Rs. 12,88,76,471/- made to the transfer price of the appellant's international transactions with AEs. 3. The Ld. AO and the Ld. DRP erred both in facts and in law in confirming the action of the Ld. TPO of making an adjustment to the transfer price of the appellant holding that the international transactions do not satisfy the arm's length principle envisaged under the Act and in doing so, grossly erred in: 3.1. Not considering the multiple year / prior year data comparable companies while determining the arm's length price in relation to the assessee's international transactions with its AEs; 3.2. Using data that was not contemporaneous and which was not available in the public domain at the time, the transfer pricing documentation was prepared by the assessee; 3.3 Disregarding the peculiar economic conditions faced by the assessee during AY 2012-13 for carrying out its manufacturing operations....
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....udication. 5. With respect to additional Ground No.3.8, the assessee has raised a legal ground stating that the Ld. AO has not complied with the directions of the Ld. DRP while passing the final assessment order u/s. 143(3) r.w.s 144C(13) of the Act. Therefore, the Ld. AR pleaded that since the directions of the Ld. DRP are not followed by the Ld. AO, the final assessment order deserves to be quashed. The Ld. AR further elaborated that the Ld. AO has not considered the directions of the Ld. DRP with regard to working capital adjustment and hence the assessment order passed by the Ld. AO is bad in law. The Ld. AR in his written submissions relied on the case of Basware Corporation India (ITA No. 1289/Chd/2019 & ITA No. 123/Chd/2017). The Ld. AR therefore pleaded that the impugned assessment order deserves to be quashed considering the fact that the directions of the Ld. DRP have not been given effect in the order passed by the Ld. AO. The Ld. AR further submitted that the Ld. AO has not rectified his order to incorporate the directions of the Ld. DRP. Therefore, the order passed by the Ld. AO has no sanctity in law. Per contra, the Ld. Departmental Representative submitted that th....
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....e's own case in ITA No. 154 & 155/Viz/2022 wherein under similar facts and circumstances, the assessee has adopted TNMM as Most Appropriate Method. Further, the Ld. DR also submitted that in the case relied on by the Ld. AR, there was a secondary method adopted by the assessee and therefore the Hon'ble High Court directed to adopt the secondary method. The Ld. DR therefore argued that in the instant case, there is no secondary method prescribed in the TP report and hence the decision of the Hon'ble Delhi High Court is distinguishable on facts. Countering the arguments of the Ld. DR, the Ld. AR submitted that in the assessee's own case in ITA No. 154 & 155/Viz/2022 there were multiple transactions and hence TNM method was used. However, in the instant case, there is only one transaction i.e sales and hence CUP method will be considered as Most Appropriate Method. 8. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. The case of the assessee is that in view of the facts and circumstances of the instant case, CUP method will be Most Appropriate Method to benchmark the international transaction with its AEs. ....