TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 1479
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....nt order was passed on 02.11.2017 which was subjected to assessee's objections before Ld. DRP. Pursuant to the directions of Ld. DRP, final assessment order was passed against which the assessee is in further appeal before us. The assessee has filed revised grounds on 08-10-2022 which read as under:- 1. For that order of the Ld.AO u/s. 143(3) r.w.s. 144C(13) of the I.T. Act is opposed to law / facts and circumstances of the case. Exclusion of Specified Domestic Transaction from Transfer Pricing Adjustments: The appellant during the year under consideration has entered into specified domestic transaction to the tune of Rs. 105,14,10,663. 2. The Ld. TPO based on the directions of Ld.DRP failed to understand the fact that related parties referred to u/s. 40A(2)(b) who received payments from the assessee has filed its return of income admitting the same payments as its income. 2.1 The Ld.TPO failed to understand all the related parties with whom the assessee has entered into specified domestic transactions are corporate entities and filing its own return of income. Hence there is not tax avoidance/evasion. 2.2 The Ld.TPO failed to understand that if specified domestic tran....
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....e issues raised by the Department (ITA No. 2086/Mds /2015, 2087/Mds/2015 and 2088/Mds/2015) 9. Product Development Expenses - The Learned Transfer Pricing Officer and Dispute Resolution Panel has failed to understand the fact that the product development expenses are not incurred this year The expense is in the nature of research and development. The benefits of research and development may or may not occur and does not have any direct link with the revenue of this year. 9.1 The Transfer Pricing Officer and Dispute Resolution Panel has failed to appreciate the fact that the adjustment has been allowed in appellant's own case by the TPO for the AY 2012-13. As is evident, the assessee is aggrieved by confirmation of Transfer Pricing Adjustments from Specified domestic transactions as well as from International transactions. 2. The Ld. AR advanced arguments and placed on record issue-wise chart. References have been made to various judicial decisions, the copies of which have been placed on record. The Ld. CIT-DR also advanced arguments and supported the assessments framed by lower authorities. Having heard rival submissions and upon perusal of case recorded, our adjudicatio....
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....sessee considering the decision of Tribunal in M/s Mobis India Ltd. (ITA No. 2112/Mds.2011 dated 14-08-2013). For getting the benefit of such adjustment, the assessee should be able to demonstrate that higher import content was necessitated by extraordinary circumstances beyond its control. The assessee sough risk adjustment. However, Ld. TPO held that the assessee was not entirely a risk-free entity. Further, in case of comparable entities, it was not possible to ascertain the different levels of risk. In the absence of adequate data, it was not possible to make reliable adjustments. Similarly the adjustment of product development expenses was rejected. 3.5 Finally, Ld. TPO proposed TP adjustments. If the adjustment was applied to AE transactions, the same would be Rs. 17.67 Crores. However, if the same was applied at entity level, it would be Rs. 33.95 Crores. Considering the fact that the issue did not attain finality, Ld. TPO proposed higher entity level adjustment of Rs. 33.95 Crores. The same was incorporated in the draft assessment order which was subjected to assessee's objections before Ld. DRP. 3.6 The Ld. DRP upheld application of TP adjustment on Specified domestic t....
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....hat Ld. TPO has not considered bill discounting charges as finance cost. The Ld. DRP has held that bill discounting do not involve borrowing of money or incurring of debt. However, we are of the opinion that bill discounting is connected with finance operations only. Therefore, we direct Ld. TPO to consider the same as finance cost only. 7. The assessee also seeks deprecation adjustment. The Ld. TPO has rendered a finding that the investment in fixed assets and expansion of business is normal activity in the course of business. The Ld. DRP has upheld the same on the ground that details of operational differences affecting comparability is not established. We would concur with these findings since the assessee is existing since the year 1991 and after such a long period, the investment in fixed assets and expansion would be nothing but part of normal business operations only. The same could not be held to be extraordinary events. Further, adequate data in this regard is not clearly demonstrated. Therefore, this adjustment could not be granted to the assessee. 8. The assessee contends that adjustment of forex loss is to be treated as non-operating in nature. The same is on the grou....