TaxTMI 
TaxTMI 
2026 (6) TMI 493
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....he assessee, the assessee submitted replies. The Transfer Pricing Officer/DC/ACIT TP 2(1)(1), New Delhi vide order dated 30.10.2023 u/s 92C(3)of the Act proposed total TP adjustment of Rs. 12,34,99,427/-. After that show cause notice dated 30.11.2023 was issued. The assessee was informed that he had an option to file objection before DRP against draft assessment order if he does not agree with draft assessment order making addition. The Draft assessment order dated 12.12.2023 was issued. 2.1 On 10.01.2024, the assessee filed objection before Dispute Resolution Penal-2, New Delhi against draft assessment order. The Dispute Resolution Penal-2, New Delhi issued direction u/s 144C(5) of the Act on 28.09.2024 wherein all additions of Rs. 12,34,99,427/- made by TPO were upheld and assessee's plea on all grounds were rejected. As per directions of DRP, ld. AO passed final assessment order dated 23.10.2024. 3. Being aggrieved, the appellant/assessee preferred present appeal on following grounds: "1. In the facts and circumstances of the case and in law, Id. DRP has erred in confirming the action of the Id. AO/TPO in rejecting the method selected by assessee company and calcu....
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..... DRP and Id. AO/TPO is illegal, unjustified, and arbitrary, contrary to the facts of the case. Relief may please be granted by accepting the benchmarking working as done by the assessee and thereby deleting the entire adjustment made to the income of the assessee. 6. In the facts and circumstances of the case and in law, Id. DRP has erred in confirming the action of the Id. AO/TPO in making an adjustment of Rs. 4,85,53,815 to the total income of assessee on account of transaction with related party. The action of the Id. 6 DRP and Id. AO/TPO is illegal, unjustified, and arbitrary, contrary to the facts of the case. Relief may please be granted by accepting the benchmarking working as done by the assessee and thereby deleting the entire adjustment made to the income of the assessee 7. In the facts and circumstances of the case and in law, ld. DRP has erred in confirming the action of the Id. AO/TPO for carrying out Benchmarking analysis with companies that were not comparable with the functioning of assessee company and rejecting the comparable provided by assessee without any 7 cogent reason. The action of the Id. DRP and Id. AO/TPO is illegal, unjustified, and a....
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.... of 31.43 falls within the 35th -65th percentile arm's length range of 25.49%-37.33% (7 functionally comparable companies; manufacturing-sales > 75% proxy filter). (ii) Ld. TPO rejected RPM and adopted TNMM (OP/OR); computed the margin shortfall on the entire Assembling Division-OR Rs. 62,64,49,987/OC Rs. 71,35,05,185/--- produced a Division-level difference of Rs. 16,74,53,181/-; then scaled it down by 29.03% (F/A factor) to Rs. 4,85,53,815/-. (iii) Ld. DRP confirmed action of TPO and held RPM unreliable because of selling/ installation/ "value-addition" functions; declined capacity- utilization adjustment. Ld. TPO failed to appreciate that RPM is the most appropriate method for following circumstances; Srl. No. Circumstances for RPM (Rule 10B(1)(b)) Position of HTIPL Met 1. Tested party purchases from its AE and resells to independent customers - directionality matters Imports semi-knockdown from four AEs and resells to final customers ✓ 2 The reseller adds no significant value Assembly from semi-knock down kits without significant value addition; assessee's consistent position ✓ 3. The reseller ow....
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.... Maa Business Solutions Pvt Ltd ----whether the comparable passes the RPT filter "The TPO is however directed to verify if this comparable passes RPT filter." 3. Sutherland Global Services Pvt " Ltd whether the comparable filter." passes the RPT filter The TPO is however directed to verify if this comparable passes RPT 4. Margin-computation errors comparables (Ground 5 before the DRP) The Panel directs the AO/TPO to verify the same and rectify the computational errors, if any. 5. Search methodology and database used to identify Sensor Assembling Segment comparables "the Panel directs the AO/TPO to clearly spell out the search methodology including the database over which the filters have been applied to select the comparables, and make the same a part of the final order." 6. JNS Instruments Ltd - whether the comparable passes persistent loss filter and other filters of the TPO The Panel directs the TPO to reverify if this comparable passes all the filters applied by him including persistent loss filter. If yes, this comparable should be included in the comparable set. 5. The Ld. Departmental Representative had no objection to the submissio....