TaxTMI 
TaxTMI 
2026 (6) TMI 867
X X X X Extracts X X X X
X X X X Extracts X X X X
.... learned AO r.w Hon'ble DRP directions u/s 144C r.w. TPO Order u/s 92CA has erred in law and on facts in making transfer pricing adjustments of Rs. 15,16,05,971/- on account of international transaction of import of coal from associated enterprise. (Page 42 of AO's order and page 2 of DRP Order) (Tax effect=Rs. 3,81,59,223/-) 1.2 That the learned AO has erred in making transfer pricing adjustments of Rs. 15,16,05,971/- ignoring that the TPO had committed grave computational and logical errors while arriving at the adjustment in Order u/s 92CA dated 31.05.2023. 1.3 That the learned AO as well as the Hon'ble DRP have erred in law and on facts in making/confirming transfer pricing adjustments without considering assessee's objections and submissions making the order contrary to principles of natural justice. 1.4 That the Hon'ble DRP has erred in law and on facts in not adjudicating upon the objections filed by the assessee on account of transfer pricing adjustments of Rs 15,18,66,950/- ISSUE NO.2: RELATING TO TRANSFER PRICING ADJUSTMENTS OF Rs. 260979/- ON INTEREST ON RECEIVABLES 2. That the learned AO r.w Hon'ble DRP direct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Rs. 5,37.83,221/- without adhering to the DRP directions which called for reverification of the margins of comparable companies and to pass a speaking order regarding assessee's contention for each comparable. 1.3 That the learned AO r.w. order of TPO Order u/s 92CA has erred in computing the transfer pricing adjustment of Rs. 5,37,83,221/- without providing detailed calculation or basis of such adjustment despite multiple requests in this regard by assessee. 1.4 That the learned AO/TO as well as the Hon'ble DRP have erred in law and on facts in rejecting the resale price method adopted by assessed by taking the foreign A as tested party and Instead adopting Transactional net margin method by taking assessee as tested party for arriving at the arm's length price. 1.5 That the leamed AO/TPO as well as the Hon'ble DRP have erred in law and on facts in considering the companies SG Projects Pvt Lid and Cosmol Energy Pvt Lid as comparable to assessee. 1.6 That the Iearned AQ/TPO as well as the Hon'ble DRP have erred in law and on facts in not providing economic adjustment from the Median Net Margin owing to unique facts of asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bservation were made therein. It was stated that following documentary evidence has been filed by assessee before AO & DRP on this issue: PERSON DOCUMENTARY EVIDENCE AYUSH GOEL (LENDER AND PRIMARY SOURCE) 1. Detailed confirmation at pg 227-229 2. Bank statement of assessee at pg 231-242 3. ITR of Ayush Goel pg 243 4. Bank statement of Ayush Goel HDFC Bank at Pg 244-246 5. Bank statement of Ayush Goel Indusind bank at pg 247-250 6. Assessment order Ayush Goel for AY 2020-21 dt 30.9.22 at pg 251-252 7. Assessment order Ayush Goel for AY 2021-22 dt 8.6.2023 at pg 253-309 ANITA GOEL (SOURCE OF SOURCE AYUSH GOEL) 8. Detailed confirmation at pg 310-312 9. ITR of Anita Goel for AY 2020-21 and AY 2021-22 at pg 313-314 10. Bank statement of Anita Goel at pg 315-324 11. Assessment order of Anita Goel for AY 2020-21 at pg 1-3 of PBK-2 12. Assessment order of Anita Goel for AY 2021-22 at pg 325-327 SUDHIR GOEL (SOURCE OF ANITA GOEL I.E. SOURCE OF SOURCE OF SOURCE OF LOAN RECEIVED BY COMPANY) 13. Detailed confirmation at pg 352 14. ITR of Sudhir Goel for AY 2021-22 at pg 353 15. Assessment order of Sudhir Goel for AY 2021-22 at pg 354-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Anita Goyal. Having all these documents and explanation before him, the AO did not raise any objections or made any enquiry with regard to the genuineness or creditworthiness of the source, the source of source, source of source of loan received by the company. Further, assessment for AY 2020-21 and AY 2021-22 have been completed u/s 143(3) in cases of Ayush Goel (lender), Anita Goel and Sudhir Goel (source of funds of lender) & no adverse inference has been drawn regarding these transactions after examination. We therefore find that the assessee has discharged its onus cast upon it under section 68 to establish the identity, genuineness and creditworthiness of the lender and the addition u/s 68 is not warranted and accordingly directed to be deleted. Accordingly, the ground of appeal no. 3.1 and 3.2 are allowed. 10. With regard to issue no.2 of transfer pricing adjustment on import of coal from Associated Enterprises as available in ground no.1.1 to 1.4, the assessee states that there is incorrect margin calculation by the TPO. The ld AR stated that the assessee is engaged in business of trading of coal and oils and imported coal of Rs. 246,06,34,712/- from its associated ent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s sub-grounds is decided on aforesaid terms and allowed for statistical purpose. 14. The 3rd issue is with regard to TP adjustment on account of interest on receivables placed at ground no.2. The ld. AR submitted that assessee had certain receivables from foreign AEs which have been treated as separate international transaction. The TPO has considered 30 days interest free period and thereafter calculated the interest on such receivables at LIBOR+4%. This has been recalculated by the DRP in AY 2021-22, wherein the DRP has allowed interest free period of 90 days. It is stated that the assessee has not charged any interest from any other unrelated customers and therefore no interest should be charged by the assessee from its foreign AEs and has relied upon the decision of the Hon'ble Bombay High Court in case of CIT-9 vs. M/s. Indo American Jewellery Ltd. in ITA (L) No.1053 of 2012 order dated 08.01.2013 and Hon'ble Delhi ITAT in case of GLOBAL LOGIC INDIA LTD., vs DCIT, CIRCLE 12 (1), NEW DELHI ITA No.1104/Del./2015 and KADIMI TOOL MANUFACTURING CO. PVT. LTD. (ITA No.7068/Del/2014) and MOTHERSON SUMI INFOTECH AND DESIGNS LIMITED ( ITA.No.6331/Del./2016) settled the view that inte....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (summary at page 107). In both cases, coal was directly shipped from Indonesia to India and AE has borne only freight cost. The AE's sale, purchase and freight payments are supported by invoices produced at Page 108-115. Upon TP reference, TPO rejected the assessee's ALP computed and instead recomputed the ALP by taking assessee as tested party, applied TNMM and proposed adjustments of Rs. 5,37,83,221/-. Before DRP, assessee objected to such adjustment on the grounds of Incorrect rejection of Foreign AE as tested party & rejection of RPM as Most appropriate method; Incorrect application of TNMM as Most appropriate method; Incorrect adoption of 2 of the 8 comparables for determining ALP; Incorrect calculation of GP/sales at 11.95% vs 2.73% by assessee and Incorrect application of TP Adjustment. 21. At the outset, the ld AR contested the order as the TPO failed to adhere to the DRP directions which mandated TPO to consider assessee's objections and to collect details of basis for calculation of ALP and to then pass speaking order on computation of GP/Sales of each comparable. 22. Per Contra, the ld. DR relied on the orders of the AO. 23. We have heard the rival submission a....