TaxTMI 
TaxTMI 
2025 (8) TMI 204
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....O) under section 143(3) read with section 143(13) and 144B of the Income Tax Act, 1961 (for short "the Act") inconsonance with the order passed by the Dispute Resolution Panel (DRP) dated 30.11.2023 u/s 144C(5) and order passed by Transfer Pricing Officer (TPO) under section 92CA(3) dated 19.12.2023 for AY 2020-21. 2. The assessee has raised the following grounds of appeal:- "1. On the facts and circumstances of the case, the order passed by the Ld. Assessing Officer (AO) is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the Ld. AO has erred, both on facts and in law, in making assessment at an income of Rs. 1,12,41,198/- as against NIL income declared by the assessee. 3....
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....computing the OP/OC at the rate of 13.68% as against 2.35% calculated by the assessee." 3. Ground Nos. 1, 2 and 7 are general in nature and does not require any specific adjudication. 4. Ground Nos. 3 to 6 raised by the assessee are only challenging the transfer pricing adjustment of Rs. 1,11,76,537/- made on account of arm's length price difference on sale of the traded goods. 5. We have heard the rival submissions and perused the material available on record. The assessee is a company engaged in the business of trading of ball bearing components. The assessee company was incorporated in May 2014 and is a subsidiary of SC URB Rulmenti [(associated enterprise) (AE)] and engaged in trading of all types of bearings. The AE is worldwi....
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....loyee benefit expenses and other expenses (94.3% of total of these expenses- being the ratio of export revenue to total revenue) 93,68,914 Total Operating Loss (-)73,40,658 Operating loss % -35.46% 7. By this process, the ld TPO tinkered with the assessee's reported margin of 6.24% and substitute the same with (-) 35.46%. The ld TPO rejected all the comparables chosen by the assessee in its TPSR and took 15 fresh comparables and arrived at the median of 13.68%. Accordingly, ld TPO proposed an arm's length price adjustment on sale of traded goods to AE of Rs. 1,11,76,537/- worked out as under:- Particulars Amount in Rs. Operating Cost (A) 2,80,40,048 Arm' Length Margin OP/OC (%)(B) 13.68% Arm's Len....
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....ctual basis of Rs. 7,65,496/-. This is the only point of dispute between the assessee computation of operating margin and TPO's computation of operating margin. We find that the assessee had practically disallowed majority of the expenses debited in the profit and loss account voluntarily in the computation of total income as under:- Particulars Debited in profit and loss account Treatment given in computation of total income Purchase of stock in trade 1,92,40,624/- Claimed as deduction allowed by AO Employee benefit expenses 42,24,383 Voluntarily disallowed Other expenses 57,10,839 Voluntarily disallowed Exception items 17,44,59,099 Voluntarily disallowed 10. Employee benefit and other ex....
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....22 Sales Export 1,95,82,372 1,95,82,372 1,95,82,372 2,08,32,224 2,02,33,894 5,98,330 2,08,32,224 Other Income Interest 8,772 8,772 8,772 Duty Drawback received 4,15,682 4,15,682 4,15,682 4,24,454 4,15,682 8,772 4,24,454 Total 2,12,56,678 2,06,49,576 5,98,330 8,772 2,12,56,678 Cost of Material consumed . . Purchase o....
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....s 56,261 14,000 42,261 56,261 Bank Charges 53,227 14,000 39,227 53,227 Insurance 14,400 14,400 14,400 Shipping and Forwarding larges 4,51,096 4,51,096 4,51,096 Watch and ward expenses 6,19,904 6,19,904 6,19,904 party balances w/o 8,22,930 8,22,930 8,22,930 Total Other Expenses 57,10,839 7,65,496 - 49,45,343 57,10,839 11. We find that the ld DRP at page 6 para 8.4.1(iii) of its directions had specifically taken note of the aforesaid contentions of the assessee and had directed the....