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2016 (9) TMI 1304 - ITAT MUMBAITPA - comparables selection - Held that:- We have perused the above decision of the Hon’ble Bombay High Court in SGS Pvt. Ltd [2015 (11) TMI 1619 - BOMBAY HIGH COURT] reveals that in the said case the comparables considered by the assessee in the TP study were rejected by the TPO and the TPO harped on the Press Note No.9 issued by Ministry of Commerce stating that payment of 1% on domestic sale and 2% on export was permitted for use of trade mark and brand name on foreign collaboration. The Tribunal on consideration of all the facts had concluded that the Royalty @ 3% could not be faulted as it was covered by FIPB instructions. Besides, that the Tribunal has recorded the fact that Transfer Pricing study indentified the uncontrolled transaction of royalty at 10%, whereas the respondent-assessee had made only a payment at 3% to its Associated Enterprises. It is the Department who took the stand that as per as per clause III of the Press Note No.9 (2000 series) issued by Ministry of Commerce, Government of India the payment of royalty up to 2% for exports and 1% for domestic sales is allowed under automatic route on use of trademarks and brand name of the foreign collaborator without technology transfer and therefore the bench marking of royalty payable by the assessee to its parent company has to be lower than 3% for the purposes of arriving at the ALP. However when it was pointed out that the case of the said assessee was covered under clause IV of the said circular, the counsel for the revenue on instructions of the Department, stated that the assessee was covered by clause IV of the Press Note 9 (2000 series) dated 8 September 2000 vide which royalty Royalty upto 8% is admissible on export sales by wholly owned subsidiaries to its offshore parent companies. The Hon’ble Bombay High Court thus considered the issue and held that the case of the assessee was covered under the Govt. Instructions. Having taken a specific stand before the Hon’ble Bombay High Court relying upon the FIPB circular in the case of another assessee, now the department is estopped from its own act and conduct to agitate in the case of the present assessee that the FIPB circular can not be applied. The Department is supposed to adopt uniform policy in cases of all the assesses in respect of the same issue and can not be allowed to adopt different yardsticks for different assessees on the same issue. Even, under the circumstances, it cannot be said that the Hon’ble Bombay High Court has not laid down any proportion of law. Decided in favour of the assessee. Disallowance of employees’ contribution towards provident fund and ESIC - Held that:- The issue is squarely covered by the decision of the Hon’ble Supreme Court in the case of “CIT vs. Alom Extrusions Ltd.” reported in (2009 (11) TMI 27 - SUPREME COURT) wherein held that the amendment to section 43B vide Finance Act, 2003 w.e.f. 01.04.2004, whereby, the second proviso to section 43B has been deleted and further amendment to 1st proviso has been made, whereby, it has been provided that nothing contained in the said section shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable for furnishing the return of income, is retrospective in nature and would operate from 01.04.1988. We, therefore, restore this issue to the file of the AO for the limited purpose to verify that if the contributions towards provident fund & ESIC were paid by the assessee on or before due date of filing of return of income and if the above contentions of the assessee are found correct, then to allow the same in the light of the decision of the Hon’ble Supreme Court in the case of “Alom Extrusions Ltd.” (supra).
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