TaxTMI 
TaxTMI 
2016 (4) TMI 1486
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.... without considering the proper facts about the comparable company. The Revenue has erred in not considering the automotive segment alone given in the financials of Dynamatic Technologies. ii) The learned Assessing Officer has erred in passing final order without taking into account the giving effect to DRP order passed by TPO vide order dated 16.02.2015 which was subsequently received by the assessee. iii) The learned TPO has erred in considering the arm's length price as Nil with respect to old LCI line machinery imported from AE amounting to Rs. 27,283,983/-. iv) The learned Assessing Officer has erred in treating the expenditure incurred towards club membership fee of Rs. 7,27,980/- as capital in nature and disallowed the entire expenditure. v) The learned Assessing Officer has erred in not granting set off of business loss/depreciation brought forward from earlier years. 3. Brief facts of the case are that the assessee is engaged in the manufacture of automobile products such as water pump assembly and oil pump assembly for automobile (passenger cars). The company mainly caters to M/s. Hyundai Motors India Ltd., and its ancillary units. The assessee company in i....
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....ve argued before us by stating that M/s. Dynamatic Technologies cannot be selected as comparables for computing the ALP because of the following reasons:- i) M/s. Dynamatic Technologies has diversified presence ranging from automotive to aerospace and wind farm and therefore has various segments which need to be taken into consideration while computing the ALP. ii) Only the relevant segment which is akin to the activities of the assessee company is to be considered while computing the average PLI. iii) The operating margin of the automotive segment of M/s. Dynamatic Technologies works out to 5.53% only, which alone needs to be considered. However, the learned TPO in his final order has combined the segments viz., automotive components and hydraulic segment and precision engineering segment of M/s. Dynamatic Technologies and thus erroneously worked out the combined operative margin at 8.40%. iv) M/s. Dynamatic Technologies Ltd's., combined segment consists of automotive segment, aeronautic segment, hydraulic and security applications segment. v) M/s. Dynamatic Technologies Ltd., has a leading private R & D organization with numerous inventions and patterns to its cred....
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.... select some other suitable comparable company whose activities and characteristics are identical and similar to that of the assessee company and thereafter determine the ALP with regard to the International transaction. It is ordered accordingly. Ground no.2 - Final order passed by the learned Assessing Officer without taking into consideration of the order passed by the TPO dated 16.02.2015 pursuant to the order of the learned DRP: 8. The learned Authorized Representative submitted before us that the learned Assessing Officer has not taken into consideration in his final order; the order passed by the learned TPO dated 16.02.2015 consequent to the order passed by the learned DRP. The learned Authorized Representative further submitted as follows:- i) The TPO erred in computing the adjustment with respect to AE purchases in the giving effect order to DRP direction. ii) The TPO though considered exchange fluctuation as part of OPM calculation in line with DRP direction, but erroneously computed the addition as Rs. 16,141,649/- instead of Rs. 11,406,478/- direction. iii) Without prejudice to the above, the Assessing Officer omitted to consider the revised addition of ....
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....port from the DVO in regard to the valuation of the machinery. Therefore, in the interest of justice, we remit back the matter to the file of the learned Assessing Officer who shall refer the case to the learned TPO for obtaining the valuation report from the learned DVO and thereafter decide the matter in accordance with the law & merit. Ground No.4 - Club membership fee of Rs. 7,27,980/-: 13. The learned Assessing Officer had disallowed the membership fee of Rs. 7,27,980/- paid by the assessee company to Tamilnadu Golf Federation as allowable deduction because he was of the view that such payments are in the nature of capital expenditure. Reliance was placed in the decision of Hon'ble Delhi High Court in the case of CIT Vs. Engineers Ltd. reported in 239 ITR 237. The learned DRP also observed that the membership fee paid is for deriving benefit for a long period and hence will fall in the capital field and therefore such expenditure cannot be considered as revenue expenditure. For the above stated reasons, the learned DRP confirmed the draft assessment order of the learned Assessing Officer. We do not find merit in the orders of the Revenue on this issue. It appears that th....