TaxTMI 
TaxTMI 
2026 (10) TMI 334
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..../DRP-1/Bang/2023-24 dated 26.08.2024 of the Ld. DRP. GROUDS OF APPEAL 1 That the DRP erred on facts and in law while disposing of the objections filed against the Draft Assessment Order dated 28 11 2023 which resulted in the impugned Assessment order issued by the AO u/s 143(3) r/w 144C (13) & 144B of the Income-tax Act (the Act) at a loss of Rs. 4, 66, 98,397/- as against the returned loss of Rs. 7, 32, 94,572/- 2 That the Ld. DRP/TPO erred on facts and in law in adjusting Rs 2,65,96,175/- to the income of the appellant on account of international transactions of imported goods and trade receivables by disregarding all the submissions made by the Appellant during the Transfer Pricing Assessment and more specifically su....
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....offered has no material bearing on the profitability d. The Ld. DRP/TPO failed to decide on the fact that the comparable producing a diversified product range needs to be assessed based on the segmented financials, which is absent in many of the comparables e. The Ld. DRP/TPO erred in deciding that turnover does not materially affect the margins of the ALP, economies of scale are relevant only in capital-intensive companies, therefore when a company is functionally similar to that of the assessee, the same cannot be excluded merely because its turnover was at a higher level or lower level. The Ld. DRP/TPO failed to note that in the case of Galax E Solutions India Pvt Ltd vs DCIT, the ITAT Bangalore held that. ....
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....ssing Officer shall not consider a company having a turnover difference of 90 crores to 700 crores, since such companies are in better bargaining power 4 That the Ld. DRP/TPO erred on facts and in law in not appreciating that the appellant has incurred losses because of huge fluctuation in the exchange rate of INR against foreign currency a. The Ld. DRP/TPO failed to consider the reliance placed by the appellant in the case of Honda Trading Corp India Pvt Ltd vs ACIT (2013 (6) TMI 184 ITAT DELHI), in which the Hon'ble Tribunal Delhi held that huge fluctuation in the foreign exchange favouring the foreign currency can be treated as a non-operating expense for the purpose of calculation of ALP b. The Ld. DRP err....
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.... e. The Ld. DRP/TPO erred in law by treating all the trade receivables of the Appellant in the purview of international transactions f. The Ld. DRP/TPO acted upon his own discretion arbitrarily to conclude that interest is chargeable for the entire trade receivables when the receivables from the AE transaction were limited to 1.47 Crores which is hardly 5% of the total g. The DRP failed to adjust/setoff the amount pending as payable to the AEs before calculating the interest deemed to have been earned from trade receivables h. The appellant submits that in the case of Microchip Technology (India) Private Ltd vs DCIT Hyderabad, it has been held by this Hon'ble Tribunal that 20. In so far as the p....
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..... To Ld. TPO/AO for considering both trade payables and trade receivables for the purpose of notional interest to be charged for determining the ALP value of the Trade receivables c. To Ld. TPO/AO for re-computation of the operating margin of the assessee after considering the submissions wherein each comparable has been distinguished with details, how the same is not comparable. d. To Ld. TPO/AO to eliminate those comparable that are functionally dissimilar huge turnover compared with the tested party, etc e. To Ld. TPO/AO, allow Extraordinary FOREX Loss as non-operative and allow computation accordingly f. Render such other orders as the Hon'ble Tribunal may deem appropriate in the interest of justi....