2024 (7) TMI 1775

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....he Income Tax Appellate Tribunal ["Tribunal"] dated 30 January 2020 and has framed the following questions for our consideration:- "2.1 Whether on the facts and circumstances of the case, Ld. ITAT was justified in upholding the order of the CIT(A) who had deleted the addition made by the AOITPO by excepting the fresh evidence/claims of the Assessee during appellate proceedings and without seeking remand report from AO/TPO? 2.2 Whether on the facts and circumstances of the case and in law, the Ld. ITAT justified in allowing the adjustment an account of extra customs duly paid by the Assessee, by taking the rate of customs duty from the data available on the official website of the European Union and without any FAR analysis....

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....n that the TPO while selecting the foreign comparables did not consider the differences in custom duty rate prevalent in lndia vis a vis Italy. 22. The first appellate authority observed that the high custom duty rates on luxury watches in lndia accounted for 32.37% of the net sales of the assessee and custom duty paid by the assessee on the import of watches and spares was above 50% of the total cost of goods sold. According to the ld. CIT(A), high custom duty rates in lndia are bound to have significant bearing on the gross margins as well as operating margins of the assessee vis a vis Italian comparables. 23. Accordingly, the ld. CIT(A) was convinced that high cost of importing goods into lndia should be adjusted for, s....