TaxTMI 
TaxTMI 
2026 (1) TMI 12
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....ke average of NYBOT price reported in the kingsman publication after converting into FOB vale as per CUP for determining ALP on the issue of import sugar when the assessee had failed to comply with the stipulation under Rule 10D (iii). Directing the AO to take contracts under Bharat Mines & Minerals dt.03-06-2014 and contract with Patnayak Mineral Pvt.Ltd. dt.15-12-2014 as cup on the issue of export of ferrous and restricting the disallowance on the issue to Rs. 3,83,367/- thereby allowing relief of Rs. 61,15,603/-. 2.The appellant craves leave for reserving the right to amend, modify, alter add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 3. The brief facts of the case are that the assessee company is a company incorporated as per the provisions of Companies Act, 1956. The Assessee Company is a wholly owned Indian Subsidiary of Cargil Mauritius Limited, which in turn is a wholly owned subsidiary of Cargil Inc. USA. The assessee company is engaged in the business of import, export and domestic trading in edible oils, fertilizers, grains oil seeds and other food products/processed food. The assessee company filed its....
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.... further submitted that the rule of res judicata as regards assessment orders and assessment for one year are not binding the officer for the next year. In this regard, he relied upon the decision of the Hon'ble High Court of Delhi in the case of Krishak Bharati Cooperative Ltd. v. Deputy Commissioner of Income tax [2012] 23 taxmann.com 265 (Delhi) wherein, the Hon'ble High Court held that there cannot be a wide application of the rule of consistency. In the case of Radhasomi Satsang vs. CIT (1992) 60 Taxman 248 itself, the Hon'ble Supreme Court acknowledged that fact that there is no res judicata as regards assessment orders, and assessment for one year may not bind the officer for the next year. 8. Ld. AR of the assessee submitted that assessee has not taken any foreign currency loan during the year for purchase of fixed assets. He further submitted that in the previous year assessment order the AO did not disallowance the interest, therefore the consistency should have maintained. In the case of Commissioner of Income tax v. Sridev Enterprises [1991] 59 Taxman 439(KAR) Hon'ble Karnataka held as under:- "4. We are in agreement with the view expressed by the tribunal. ....
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.... the fact that Capital Work in Progress of Rs. 1,58,63,87,994/- has been capitalized during the year and no substantial purchase of fixed assets were made. The assessee ECB loan was utilized during the A.Y.2004-05 which was not objected by the Ld. AO. 8.2 From the perusal of the order of the Ld. CIT(A), reveals that in the remand report the AO has reported that assessee could not prove the correctness of its claim. The assessee did not furnish the rate of interest, but as per Audit Report the assessee has used short term loan for long term investment. The projects were completed and put to use in July, 2004 and the interest cost capitalized for four months only. The Ld. AO has not disputed the Capital work in progress. The Ld. CIT(A) has rightly applied the rate of interest for four months on the short term loan of Rs. 20,45,26,795/- and the internal accrual of Rs. 6,25,57,646/-. We do not find any reason to interfere with the findings of the Ld. CIT(A), hence, we uphold the same and reject the ground no. 1(i) raised by the Revenue. 9. As regards Ground No.1(ii) raised by the Revenue, Ld. DR submitted that Ld. CIT (A) has erred in directing to take the average of NYBOT price ....
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....on Kingsman Freight Report submitted by the appellant on sugar. The TPO has also observed that Kingsman Freight Report is an internationally renowned freight report from an independent broker. With respect to import of sugar, the TPO has converted the CIF price to the FOB price and determined the adjustment in respect of the imports of sugar at Rs. 69,48,422/-. During the appellate proceedings the appellant contended that the approach formulated by the TPO of making an adjustment in the transfer price instead of comparable uncontrolled price is in contrary to the provisions of the Act. The appellant has drawn reference to Para 2.19 of the Transfer Pricing Guidelines on 'Review of Comparability and of Profit Methods' issued by the OECD and also "Guidance note on report on international transactions under section 92E of the Income-Tax Act, 1961 (Transfer Pricing)" issued by Institute of Chartered Accountants of India (ICAI). The appellant has argued that the appellant company should be given the range benefit on transaction relating to import of sugar on the ground that that price reported at NYBOT in itself is a mean/average of different prices. The appellant has placed reli....
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.... the above chart whereas the TPO has used FOB value for benchmarking. In my view the FOB price of sugar should be used for benchmarking. As regards the import of sugar, the AO/TPO is directed to take two companies, namely the NYBOT price and the price reported in Kingsman publication after converting into FOB value. The difference of arm's length should be calculated accordingly. The adjustment to the international transaction is subject applicability of +/-5% as per proviso to section 92CA(2) of the I.T. Act." 9.3 We noted that the assessee has not put any such allegations in any of the orders passed so far for the relevant assessment year. The Ld. CIT(A) affirmed the approach of the TPO in relation to adjustments done by converting CIF price into FOB prices. The Ld. CIT(A) also directed the TPO to consider the average of prices reported in Kingsman publication report and NYBOT for the purpose of computing of ALP after converting into FOB value. The Ld. CIT(A) also allowed the benefit of adjustment to the international transaction is subject to the applicability of +/- 5% as per the proviso to the section 92C(2) of the Act. We do not find any reason to interfere with the findin....
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....rd June, 2004 and 15th December, 2004 respectively. The assessee has argued that for benchmarking such trade, the TPO should have considered the broker's or trader's quote dated 15 December, 2004. During the course of the appellate proceedings the appellant has submitted the price information obtained from International Business Information Services (IBIS) in respect of iron ore as additional evidence. It was forwarded to the TPO on 12.06.2012. In the remand report dated 13.06.2012 the TPO has objected to it on the ground that IBIS is a private party and price quotes provided by IBIS are not covered within the provisions of Rules 10D(3) of the Rules. In respect of the TPO's remand report, the appellant has submitted that IBIS is an institute of national repute and price quotes provided by it are covered by Rules 10D(3)(b) and 10D(3)(c). The specifications mentioned for the AE are not available in the price quote provided by IBIS. Accordingly, the price quotes provided by IBIS are not acceptable in the present case. In my view, the contract dated 03-May-04 should be compared with CUP as per Bharat Mines & Minerals dated 03.06.04 and the contract dated 16.Dec-04 should be compared wi....