TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 769
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....ent appeal under Section 260-A of the Income Tax Act, 1961 [the Act] impugning an order dated 04.09.2024 passed by the learned Income Tax Appellate Tribunal [ITAT] in MP.No.63/Bang/2023 in IT(TP)A. No.2806/Bang/2017 in respect of the Assessment Year [AY] 2013-2014. 3. The respondent [the Assessee] had filed the aforementioned miscellaneous application seeking rectification/modification of an order dated 02.03.2023 passed by the learned ITAT in IT(TP)A.No.2806/Bang/2017. The said order was passed in an appeal filed by the Assessee against the final assessment order dated 21.07.2022. The principal dispute before the learned ITAT was in respect of transfer pricing adjustments as directed by the transfer pricing officer [TPO], which was furt....
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....,521/- in the trading segment. 6. In so far as manufacturing segment is concerned, the learned TPO determined the arms length PLI at 3.45% and accordingly made in adjustment of Rs. 6,02,89,351/- for the manufacturing segment. 7. The learned AO passed a draft assessment based on the adjustments made by the learned TPO. The Assessee preferred its objections before the DRP. 8. The learned DRP disposed of the objections raised by the Assessee in terms of the directions issued on 26.09.2017 under Section 144-C(5) of the Act. One of the objections raised by the Assessee related to the adoption of tolerance limit of 1% variation under Section 92-C(2) of the Act instead of 3% in respect to the trading segment. However, the learned DRP reje....
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.... trading activities. The Assessee had furnished data to establish that its average monthly closing inventory was more than 10% of the sales pertaining to the trading activities and therefore it did not satisfy the second condition. Thus, it could not be considered as a wholesale trader. The learned ITAT had noted the same, as is evident from the following extract from the Order dated 02.03.2023 passed by the learned ITAT: "13. The Id.AR of the assessee submitted that the TPO has considered the tolerance range in trading activity +1%, whereas the assessee's comparables margin is 3.54%. The OP/OR of the assessee is 0.94%. The TPO for trading segment computed OP/OR at 0.22%. The tolerance range of 1% as notified by the CBDT on Apr....
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....d total cost 10,74,34,03,259/- pertaining to trading activities and thus it is 93.73% of the total cost and satisfies the First criteria. Second condition: Average monthly closing inventory of such goods is ten percent or less of sales pertaining to such trading activities In the present case, Assessee's total inventory of traded goods as on 31.03.2013 is Rs. 122,99,44,688/- and as on 31.03.2012 is Rs. 110,03,72,957/- and thus average inventory is Rs. 116,51,58,822/ (FIB Pg. 301) which is more than 10% of total sales of trading goods is Rs. 103,68,56,2581-(10% of 1036,85,62,584) (PB Pg. 300). Since, Average inventory i.e., is higher than 10% of total sales of traded goods the assessee does not lie in the definition of ....
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....perused the submissions advanced by both sides in the light of records placed before us. On perusal of the transfer pricing order passed by the Ld.TPO, we note that the assessee has not been categorised as a wholesale trader but it has been called a "stripped-down distributer if it takes risks of distributer" as per TPO order 6.4.3. In assessee's own case for subsequent year in ITA NO. 3372/Bang/2018 at para No. 28 Tribunal held that the assessee is trader and fixed the tolerance limit at 3% as per para No. 28 which is quoted by us in our order at para No. 13.4. Therefore, para 13.5 deserves to be amended as under: "13.5. The Ld.DR has relied on Notification No.30/2013 dated 15/04/2013 and has considered assessee to be a wholes....