TaxTMI 
TaxTMI 
2022 (5) TMI 1679
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....Dispute Resolution Panel-2, Bengaluru dated 27.12.2017 u/s 144C(5) of the Act. The assessee has raised multiple grounds of appeal. However, during hearing, Ld. AR sought adjustment of custom duty (the credit of which is not available to the assessee) as granted by the Tribunal in subsequent years. The Ld. AR submitted that this is the first year of operations and therefore, the aforesaid adjustment ought to have been granted to the assessee. The Ld. AR, also filed additional ground of appeal to submit the Transfer Pricing (TP) adjustment should be restricted to the value of international transactions as carried out by the assessee with its Associated Enterprises (AE). Since the additional ground does not require appreciation of new facts, t....
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....ird party suppliers. Additional Grounds of Appeal 1. The AO/DRP erred in making the transfer pricing adjustment, at entity level (which also includes transactions with third parties), instead of restricting the same to the value of international transactions entered with AEs. 2. Having heard rival submissions and after due consideration of orders of lower authorities, our adjudication would be as given in succeeding paragraphs. This is second round of appeal since the matter, vide Tribunal order dated 19.05.2016 in ITA No. 852/Mds/2014, was restored back to Ld. DRP with the following directions: 6. We have carefully gone through the provisions of Sec. 144C of the Act. Sec. 144C(5) says that the DRP shall issue such directions as i....
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....sing Officer in all fairness ought to have given an opportunity to the assessee to file its objection. Such an opportunity was not given to the assessee. Moreover, the TPO was not empowered to pass any order subsequent to the direction of the DRP. The Assessing Officer is expected to pass an assessment order in conformity with the direction of the DRP without any intervention either by the TPO or by any authority. Therefore, there is a clear violation of the procedure prescribed u/s 144C of the Act. Moreover, as rightly submitted by the ld. Counsel for the assessee, the DRP made adjustment with regard to capacity utilization and customs duty adjustment without issuing any notice. This Tribunal is of the considered opinion that there was a c....
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....Ld. DRP has issued directions in its order dated 27.12.2017 which has been given effect to by Ld. AO vide order dated 29.12.2017 wherein the income of the assessee has been determined at Rs.608.14 Lacs. However, the assessee preferred rectification before Ld. DRP, which were disposed-off vide order dated 26.03.2018. Pursuant to the rectified directions, an order has been passed by Ld. AO on 27.03.2018 wherein the income of the assessee has been re-determined at Rs.176.29 Lacs. In the meantime, the assessee has preferred further appeal to Tribunal against directions dated 27.12.2017 which is the present appeal before us. 4.1 To understand the dispute, it would be imperative to take note of the sequence of events as enumerated in Tribunal or....
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....ith certain direction as extracted in preceding para-2. 4.3 Pursuant to the same, directions have been issued by Ld. DRP vide order dated 27.12.2017. During set-aside proceedings, the assessee, inter-alia, submitted that this was the first year of commercial operation and it imported huge raw material to the extent of 85% as against 16.10% imported by comparable entities. To import the goods, the assessee had to incur additional cost in the form of basic customs duty which is non-cenvatable as compared to the comparable companies. Therefore, the adjustment of the same should be granted to the assessee. Reliance was placed on the decision of this Tribunal in assessee's own case in ITA No.692/Mds/2016 for AY 2011-12 wherein such an adjustmen....
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.... has to be nullified to make the comparable at par with the assessee. Accordingly, this adjustment should have been granted to the assessee to make the margins comparable. In fact, Tribunal, in assessee's own case for AY 2011-12, ITA No.692/Mds/2016 order dated 25.01.2017, has allowed this adjustment. Following the same, this adjustment has also been allowed by Tribunal in AY 2012-13, ITA No.2560/Mds/2016 order dated 18.08.2017. Pursuant to the same, suitable adjustments have been granted by Ld. TPO for both the years. Similar adjustment has also been granted by Ld. DRP in AY 2010-11. Therefore, respectfully following the earlier orders of Tribunal, we direct Ld. TPO to grant this adjustment. The ground thus raised stand allowed. 6. Anothe....