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2019 (8) TMI 1157 - ITAT PUNECapacity Utilization Adjustment - HELD THAT:- As relying on own case [2019 (6) TMI 663 - ITAT PUNE] we set aside this issue to the file of the Assessing Officer/ Transfer Pricing Officer and direct that the procedure led out in the order of the Tribunal be applied in working out the adjustment on account of capacity utilization. Comparable selection - HELD THAT:- We have already examined and directed regarding issue of capacity utilization to be done by the TPO/AO after following the decision of the Co-ordinate Bench of the Tribunal, Pune in assessee’s own case. Therefore, that issue is set aside to the file of Assessing Officer/ TPO. In view of the matter, we upheld the TPO’s observation in excluding three comparables i.e. Force Motors Limited, Hindustan Motors Limited and Kerala Automobiles Limited and accepting only Mahindra & Mahindra Limited and Tata Motors Limited. Violation of Section 144C - along with this draft assessment order, the AO had issued notice of demand u/s.156 and penalty notice u/s.274 r.w.s.271(1)(c) - HELD THAT:- As decided in REHAU POLYMERS PVT. LTD. AND VICE-VERSA [2017 (8) TMI 1294 - ITAT PUNE] undoubtedly, the said assessment was framed as draft assessment but in actual fact, the Assessing Officer had made the assessment in the hands of assessee by not only assessing the income but also determining the demand payable. In the case of draft assessment order, proposed additions are to be made and the assessee is show caused either to accept the same or file the objections before the DRP. However, in the present facts, there was not a proposal for making addition but final assessment order was passed. Undoubtedly, the AO said that he is passing draft assessment order and the assessee was also at liberty to file the objections before the DRP or accept the same, but in actual fact, the order passed by the AO was complete assessment order which is not envisaged under section 143(3) r.w.s. 144C. Accordingly, we hold that draft assessment order passed in the case is invalid in law. Thus, the Cross Objection No.2 raised by the assessee is allowed.
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