TaxTMI 
TaxTMI 
2026 (8) TMI 889
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....bunal ("ITAT") in Income Tax Appeal No. 115/PUN/2011 (A.Y. 2006-07). 2. We have heard Mr Arjun Gupta, learned counsel for the Appellant and Mr Percy Pardiwala, learned Senior Advocate appearing for the Respondent. The facts of the case, in a nutshell, are that the Assessee/Respondent in this case is a company registered under the provisions of the Companies Act, 1956. It is inter alia engaged in the business of manufacturing and sale of Internal Combustion (IC) Engines, Spares, Components (Including Bought-Outs) and Generating Sets, Service of Engines & Genesets, Trading in Power Generating Sets and Allied Equipment etc. The Assessee also has a 100% export oriented unit through which, it conducts manufacture and export of IC Engines and ....
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....porate Tax Disallowance leading to addition of a further amount of Rs. 9,93,21,355/-. Aggrieved thereby, the Assessee had approached the Income Tax Appellate Tribunal by filing Appeal No. 115/PUN/2011 which was disposed of by the impugned order dated 3rd March 2011, partly allowing Appeal filed by the Assessee. Hence, the present Appeal under Section 260-A of the Income Tax Act, 1961. 3. In the memorandum of the Appeal, the Appellant-Revenue has projected the following substantial questions of law. "A. Whether on the facts and circumstances of the case and law, Hon'ble Tribunal was justified in accepting the benchmarking of the assessee done by aggregating the transactions of export to AE (Rs. 461.15 cr.) and domestic sales to t....
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....ithout any cogent reasoning and hence perverse as the Hon'ble Tribunal dismissed the detailed working of re-allocation of various costs made by the TPO between Domestic Segment and Export Segment of 'manufacturing activity.? F. Whether on the facts and circumstances of the case and law, Hon'ble Tribunal was justified in giving the direction to the TP to adopt OP/OR as the Profit Level Ο Indicator (PLI) for benchmarking the transaction of Export to AE, disregarding the fact that what was being benchmarked was revenue transaction and hence the cost base was the most appropriate base for selection of Profit Level Indicator (PLI) as the denominator being non-variable factor? G. Whether on the facts and circumstances of....
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....ppeal of the Assessee. It would be pertinent to mention herein that the Assessee has not preferred any Appeal against the Judgment and Order dated 3rd March 2017, to the extent the grounds taken by the Assessee were rejected by the learned Tribunal. 5. According to Mr Gupta, the Tribunal has erred in accepting the benchmarking analysis by aggregating export transactions with associate enterprises and domestic sales to the third parties at entity level. The learned counsel for the Appellant has further argued that the learned Tribunal has committed an error in relying upon the case of Demag Cranes & Components (India) Pvt. Ltd. Vs. Dy. CIT ITA No. 1683/PN/2011: A.Y. 2007-08, although the ratio laid down in that case was not applicable in ....
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....y the Appellant in the memo of Appeal are nothing but mere legal objections raised against the impugned Judgment and Order dated 3rd March 2017 passed by the Tribunal and, therefore, cannot be treated as substantial questions of law, yet, after a careful examination of the record and after going through the impugned Judgment, we are convinced that there are substantial questions of law that would arise for consideration of this Court in the present Appeal. Therefore, the Appeal is admitted to be heard on the following substantial questions of law:- "1. In view of the language employed in Section 92 of Income Tax Act r/w Rule 10A(d) of Income Tax Rules, whether bench marking analysis, applying the TNMM method, can be employed for ag....