2026 (5) TMI 1551

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... read with section 143(3A) & 143(3B) of the Income Tax Act (hereinafter called 'the Act') for Assessment Year 2016-17. 2. Brief facts of case are that, the assessee company filed return of income 'NIL' on 30.11.2016. The case was selected for complete scrutiny assessment on following issues. S. No. Issue i. Whether tax aspects related to investments/advances/loans have been considered in the return of income. ii. Whether value of international transactions are correctly shown in Form 3CEB and return of income. iii. Whether receipt of foreign remittance has been correctly offered for tax. iv. Whether deduction claimed on account of business loss is admissible. v. Whether the share capital is genuine and....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....#39;ble DRP erred both on facts and in law in confirming additions made by the Ld. AO/Ld. Transfer Pricing Officer ("TPO") to the Appellant's income by issuing an order without appreciation of facts and law. 2. That the Ld. AD erred in proposing to assess the income of the Appellant at INR 3,81,07,198 as against the returned income declared by the Appellant at INR NIL by making an addition of INR 3,81,07,198/-, being the transfer pricing adjustment, by holding that Mitsui India's international transactions do not satisfy the arm's length principle envisaged under the Act. 3. That the Ld. AO grossly erred in assessing the total income of the appellant at INR 3,81,07,198 as against the returned income declared by....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....l set of comparables despite of their comparability due to functions performed, assets employed, risks assumed in comparison with the assessee. 6.3. Not allowing the adjustment for differential rates/methods of depreciation charged for calculating the margins. 6.4. Not allowing economic adjustment i.e. adjustment for Extra Ordinary or exceptional expenses incurred the appellant during the year. 6.5. Not appropriately computing the operating margin of the Assessee as well as of the comparable companies. C. OTHER GROUNDS: 7. Ld. AO/TPO has erred both the fact and in law in initiating penalty proceedings under section 271(1)(c) of the Act. The above grounds of appeal are mutually exclusive ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... 7. From examination of record, in light of aforesaid rival contentions, it is crystal clear that the appellant/assessee has challenged the action of Departmental Authorities. Grounds of appeal No. 1 & 2 are general in nature. 7.1 Grounds of appeal nos. 3 to 5 regarding transfer pricing adjustments twice and bringing forward loss and unabsorbed depreciation having deemed not set off. Ld. AO have been challenged. Ld. Departmental Representative has given no objection for referring the matter back to ld. AO. Therefore, the action of ld. AO for proposing to the assessee income of assessee as Rs. 3,81,07,198/- as against the returned income declared by the appellant/assessee at "Nil" by making addition twice and income from business and ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... has been removed by ld. TPO in Financial Year 2019-20 on the basis of functional and product dissimilarity. 7.6 Nocil Ltd manufactures Rubber chemicals. Popular Brands are PILFLEX@Antidegradants, PILNOX Antioxidants, PILCUR@ Accelerators, Post Vulcanization Stabilizer and Pilgard@ Pre- Vulcanization Inhibitor. The assessee is manufacturing polypropylene compound and polyolefin compounds with cost of raw material consumed to sales 28.63%. 7.7 From above, it is evident that three comparables selected by ld. TPO and ld. DRP are not just, fair, reasonable and deserves to be set aside. 7.8 The five comparables selected by the assessee namely as under:- S. No. Name of Comparables Company Depreciation Method 1 Sreechem Res....