2025 (9) TMI 897

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....provisions of Companies Act, 1956. It is engaged in the business of manufacture and sale of tyres, tubes and dealing in flaps. The return of income for AY 2021-22 was filed on 03.03.2022 declaring Nil income and also reported book profit under MAT of Rs. 1088,40,84,655/-. The assessee company also reported the certain international transactions from AE in from 3CEB. 3. On noticing the above international transactions, the AO referred the matter to the Transfer Pricing Officer (TPO) u/s. 92CA(1) of the Act for the purpose of benchmarking the above international transactions. The TPO vide order dated 15.10.2023 passed u/s. 92CA(3) of the Act suggested upward TP adjustment aggregating to Rs. 11,40,90,416/-in respect of the following segment....

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.... (TPO), are grossly injudicious, unwarranted, against the facts of the case and bad in law. 2. The additions/disallowances made are unsustainable, unjust, highly excessive and are not based on any material on record. Total Business loss of the Appellant has been incorrectly and un-lawfully assessed under normal provisions of the Act at Rs. 11,53,70,330/-as against returned income of Rs. NIL.. 3. Regarding transfer pricing adjustment of Rs.59,91,468/- (Corporate IT services) a. That the Ld. TPO/AO/ Dispute Resolution Panel ('DRP') erred in not appreciating that the Transfer Pricing documentation is maintained as per the provisions of the Indian Transfer Pricing Law, and in the absence of any defect, the eco....

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....panies. e. That the TPO/ AO/DRP erred in not allowing the benefit of working capital adjustment and risk adjustment, to the Appellant, without appreciating that such an adjustment is warranted in terms of Rule 10B(3) of the Rules. 4. Regarding transfer pricing adjustment of Rs. 70,38,193/- on Cost-to-Cost Recovery of Salary expenses from AES a. On the facts and in the circumstances of the case and in law, the Ld. AO/TPO/DRP grossly erred in not appreciating that the recovery of salary expenses of Rs. 6,62,10,655/-by the Appellant Company from its associated enterprises ('AEs') is purely on cost to cost basis, hence no mark-up was warranted. 5. Regarding transfer pricing adjustment of Rs. 10,10,60,....

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....t has not received any exempt income, as the Appellant has invested in unlisted equity shares, the disallowance of Rs. 12,22,000/-u/s 14A of the Act would be made per circular No. 5/2014 dated 11th February 2014. The above grounds are without prejudice to each other. The Appellant Company reserves the right to add, alter, amend or modify any of the grounds appealed against during the course of hearing." 8. The ground of appeal Nos. 1 & 2 are general in nature, requiring no adjudication. 9. The ground of appeal No. 3 challenges the addition on account of transfer pricing adjustment of Rs. 59,91,468/- in respect of provision of Corporate IT services. This issue stands remitted back to the file of the AO/TPO in terms of the pass....