TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 602
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....lared at Rs. 26,09,71,590/-. The case was taken under complete scrutiny. Notices under Section 143(2) dated 17-08- 2018 and 27-09-2018 were issued. Notices under Section 142(1) of the Act with questionnaire were issued. Assessee submitted replies which were verified. The assessee is a manufacturer of Invertors and UPS which are sold to two AEs as also to other dealers in the open market. The selling price charged from AE is comparable or less than the price charged from dealers in open market. Regarding international transactions, Ld. TPO passed order dated 24.01.2021 under Section 92CA(3) of the Act and directed the adjustment of Rs. 21,09,91,682 u/s. 92CA(3)/80-IA(10)/80-IC of Act. The Ld. TPO advised the ld. AO to consider initiation of penalty under Section 270A of the Act against the assessee. After receipt of the TPO order, the Ld. AO issued the draft order dated 24.03.2021 under Section 144C of the Act. 4. Against draft assessment order dated 24.03.2021, the appellant/assessee preferred objections before Ld. Ld. Dispute Resolution Panel-I, New Delhi which were decided on 02.11.2021. 5. As per directions of Ld. DRP, Ld. AO passed order dated 02.03.2022. 6. Being aggr....
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....DRA SHAH (HUF) 2020-TII-210-ITAT-AHM-ΤΡ 7. Ld. DRP/TPO erred in presuming that undertaking is covered by Section 80-IA(8) merely on the ground of filing of 3CEB report without any finding that the consideration at which transfers were made of goods and services of the eligible business as recorded in its accounts "does not correspond to the market values of such goods "as held by Delhi High Court In PCIT Vs Harpreet Kaur [2017] 88 taxmann.com 641 (Delhi). 8. Ld. DRP/TPO erred in presuming that undertaking is covered by Section 80-IA(10) merely on the ground of filing of 3CEB report without showing any 'arrangement as held in ACIT vs M PACT TECHNOLOGY SERVICES PVT LTD [TS-720-HC-2018(KAR)-TP] ITA No.228/2013 dated 11.07.2018, ACIT vs. Faurecia Interior Systems India Pvt. Ltd 2018-TII-303-ITAT-PUNE-TP, Honeywell Automation India Limited Vs. DCIT 2015-TII-62-ITAT-PUNE-TP. 9. Ld. DRP/TPO erred in selecting comparable randomly when products manufactured by the these so called comparables were not similar to the products of the assessee. The Ld. DRP approved the action of the TPO without even knowing as what products were being manufactured by the s....
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...., the above undertakings were entitled to 100% Excise Duty Exemption for a period of 10 years from the date of commencement of commercial production. In terms of the above notification, the company has availed Excise Duty Incentive amounting to Rs. 30,35,92,206/- during the relevant year under consideration. 2.2 The purpose behind the introduction of the notification no. 49-50/2003 was to intensify and accelerate the growth of industries in the specified backward areas in the State of Himachal Pradesh/Uttaranchal. The Excise Duty exemption/incentive had been granted to the company for setting up of manufacturing unit which fell in the specified backward area. Since the incentive had been granted for setting up of manufacturing unit in backward area, the same should be treated as capital receipt. In terms of notification No. 49-50/2003 dated 10.06.2003, goods manufactured in the aforesaid backward area in the State of Himachal Pradesh/Uttaranchal was exempt from the whole of the duty of Excise or additional duty of Excise, as the case might be, leviable thereon for a period of 10 years from the date of commencement of commercial production. In this regard it was to be....
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....ted that the appellant/assessee filed its return of income for the relevant AY on 27-11-2017 declaring Total Income at Rs. 26,09,71,590/- after claiming deduction u/s. 80IC of Rs. 8,52,91,614/-. The financials along with acknowledgement of return of income are Annexure-1. (Pg. No. 1-21 of the PB), The assessee has also duly filed Form 10CCB for claiming such deduction which is attached as Annexure-3 (Refer Pg. No. 47-52 of the PB). The case of the assessee was selected for scrutiny assessment and was referred to the Ld. TPO to determine the arm length price of the transactions. The Ld. TPO passed its order dated 24-01-2021, Annexure-5 (Pg. No. 89-111 of the PB). Ld. TPO considered 6.09% as arm length profit ratio and made an addition of Rs. 21,08,91,682/-. Later the said order was rectified u/s. 154 of the Act dated 20-01-2022 wherein arm length profit ratio margin was considered as 6.04% and accordingly enhancing the addition to Rs. 21,89,92,804/-. Rectification order is attached as Annexure-7 (Pg. No. 121-128 of the PB). Later appellant filed objections before the DRP in Form 35A, same is attached as Annexure-6. However, the DRP without considering the submissions of the ap....
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.... Rs. 30,35,92,206/-. Working of the said exemption is attached as Annexure-11. (Page No. 172 of PB). The excise quarterly return filed by the appellant has also been attached as Annexure-14. (Kindly Refer Pg. No. 180 to 191 of the PB). The said incentive was given to the said undertaking in terms of the observations of the then Hon'ble Prime Minister for generation of employment and utilization of local resources. The said fact is evident from Office Memorandum dated 07-01-2003. Copy of the office memorandum and scheme is attached as Annexure-13. (Page No. 177 to 179 of PB). Hon'ble High Court of J&K in the case of M/s. Shree Balaji Alloys vs. CIT (333 ITR 335) held that Excise Duty subsidy, Interest Subsidy received with the object of creating avenues for perpetual employment, to eradicate the social problem of unemployment in the state by accelerated industrial development is capital receipt. Copy of the order of Hon'ble High Court is attached. (Page No. 192 to 200 of PB). The same view has been upheld by Hon'ble Supreme Court vide order in Civil Appeal No. 10061 of 2011 dated 19.04.2016 in CTT vs. Shree Balaji Alloy & others, Copy of the order of Hon'ble Supr....
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....ical issue the matter has been allowed by the Hon'ble Jurisdictional ITAT in the case of DCTT vs. PC jewelers Limited (ITA No. 3084/Del/2024) already attached as Annexure-C to case law paper book (Page No. 22 to 81). 10. Learned Authorized Representative for the appellant/assessee submitted that ground of appeal nos. 2, 3, 11 & 12 are not pressed. 11. Learned Authorized Representative for the appellant/assessee qua ground of appeal no.4 submitted that Ld. DRP erred fundamentally in arbitrarily presuming, that the appellant manufactures 'Electronic including hardware" or 'computers, its parts, UPS, Inverters and all kinds of electric and electronics goods' however as shown in TP study report filed by appellant attached as Annexure-4 (Page No. 53 to 88 of PB)- under heading functions and it was clearly stated that it is engaged in manufacturing of UPS, Inverters, Stabilizers, wire and/or their parts and details were furnished in Annexure (i) to (vi) of the TP Study report to show that approximately 82% turnover is of UPS, Inverters and Stabilizers. 12. Learned Authorized Representative for the appellant/assessed regarding grounds of appeal Nos. 5, 9 and 10 su....
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....88 taxmann.com 641 (Delhi) wherein it was held as under: "The above approach of the AO was rightly found by the CIT(A) to be not justified. Without pointing out the error, if any, in the accounts or disturbing the figures of sales or purchases, to compare the trading results of business of two units and simply reject was clearly not a "reasonable basis", as contemplated by the proviso to Section 80-IA(8) of the Act." 13.1 It is humbly submitted that the Ld. DRP/TPO erred in presuming that undertaking is covered by Section 80-IA(10) merely on the ground of filing of 3CEB report without showing any 'arrangement. It has been held by Karnataka High Court in the case of ACIT vs M Pact Technology Services Pvt. Ltd. [TS- 720-hc-2018(Kar)-TP). Similar view has been taken by Pune ITAT in the case of ACIT vs. Faurecia Interior Systems India Pvt. Ltd 2018-TII-303-ITAT- PUNE-TP. 14. Learned Authorized Representative for the appellant/assessee qua ground of appeal no.8 submitted that the Ld. DRP/TPO erred in selecting comparable randomly when products manufactured by these so called comparable companies were not similar to the products of the assessee. The Ld. DRP approved th....