TaxTMI 
TaxTMI 
2026 (7) TMI 1886
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....cer (AO) u/s. 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (for short 'the Act') inconsonance with the order passed by the Dispute Resolution Panel (DRP)-2, New Delhi dated 22.09.2021 u/s. 144C(5). 2. At the outset, we find that the assessee had raised additional ground challenging the validity of assessment on the ground that the same is barred by limitation in the light of the decision of the Hon'ble Madras High Court in the case of Roca Bathroom Products Pvt Ltd. The same was later withdrawn by the assessee. Hence the said additional ground is not even admitted. 3. The assessee has raised the following grounds of appeal before us:- "General Ground- That the Ld. ('AO') of National Faceless Assessme....
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....ing of comparables, which is bad in law. 5. That the Ld. AO (NaFAC) / Ld. TPO and consequently the DRP have grossly erred in law and on facts and circumstances of the appellant's case in rejecting appellant's comparable Calsonic Kansei Motherson Auto Products Private Limited, which is engaged in manufacturing of non-core auto-components similar to the appellant which is against the tenet of comparability under Rule 10B(2) of the Income Tax Rules, 1962 ('the Rules'). 6. That the Ld. AO (NaFAC) / Ld. TPO and consequently the DRP have grossly erred in law and on facts and circumstances of the appellant's case in selecting new comparables which have dissimilar functional, product and industry profiles as co....
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.... 144B of the Act, without the authority of law. 10. That each ground is independent and without prejudice to other grounds raised herein." 4. We have heard the rival submissions and perused the materials available on record. The assessee was engaged in manufacturing of Car Air Conditioner Systems and Components such as compressors, HVAC units, cooling units, evaporators, condensers, hose & pipes and Receiver Drier for sale primarily to unrelated parties in India. The 50% shareholding in assessee is held by Sanden International Ltd, Singapore and Sanden Holdings Corporation, Japan and the remaining 50% shareholding is held by the Indian shareholders (Vikas group). The list of international transactions carried out by the assessee....
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....to the total income of the assessee by Rs. 4,73,00,778. The assessee filed objections before the Learned Dispute Resolution Panel (DRP). The Learned DRP retained all the 10 comparables chosen by the Learned TPO but directed him to grant working capital adjustment to the assessee and also to examine the operating margin of the assessee. Accordingly, the transfer pricing adjustment was reduced to Rs. 2,48,68,842 by the Learned TPO in the order giving effect dated 26-10-2021. Aggrieved, the assessee is in appeal before us. 6. Before us, the Learned AR submitted that if only one comparable company chosen by the assessee i.e. Calsonic Kansei Motherson Auto Products Pvt Ltd is included, then assessee would be through with its margins and the s....
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.... construed as a good comparable. Further as stated supra, the said comparable has been included in the list of comparables by the Learned TPO himself in Assessment Years 2020-21 and 2023-24 vide orders referred supra on functional similarities. Hence there is no reason to take a divergent stand when the functions performed by the said comparable company remains the same in this year as well as in subsequent years. Hence we direct the Learned TPO to include this comparable company in the final list of comparables and re-compute the arithmetical mean margin of all the comparables and compare the same with the assessee's margin and decide the determination of ALP accordingly in accordance with law. Accordingly, the Ground No.5 raised by the as....