TMI Blog2010 (6) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... r assessment year 2002-03 being ITA No. 2873/Mum./2007: 3. The first issue is in respect of disallowance claimed by the assessee of Rs. 9,752,653 which was due to the loss arisen on foreign exchange fluctuation. 4. We have heard the parties. The assessee has debited an amount of Rs. 9,752,653 towards foreign exchange loss and the same was claimed as deduction. The Assessing Officer sought explanation of the assessee on the said claim. The assessee explained that during the financial year, he had made certain imports and the foreign exchange loss was as a result of fluctuation in foreign currency. The Assessing Officer disallowed the assessee s claim and made addition in the computation of the total income. The assessee carried the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions with other group of companies; ( i )Enron Wind Corpn. BV which is the holding company ( ii )Enron Wind Service GmbH which is engaged in the business of maintenance of wind turbine ( iii )Tacke Wind Energy GmbH which is engaged in the manufacture and sale of turbine generator ( iv )Tacke Energia EOLICA SL which is engaged in the manufacture of wind turbines. 7.1 The assessee imports raw material i.e., turbine components; consumables, equipments and tools from overseas Enron group companies mentioned above which are the Associated Enterprise (AE). As per normal industry practice, the contract for sale of wind turbines generally includes its erection, commissioning etc. The assessee has to carry out the civil found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gin; hence, the profit margin of AEs in respect of import of raw material, consumables, tools and equipments are made from the AEs at ALP. 7.3 For determining the ALP in respect of the goods, the assessee has divided the same into two categories : ( i )Turbine components; ( ii )Consumables, equipments and tools 7.4 In respect of the consumables, tools and equipments, the assessee has contended that as no method is applicable and hence, no ALP can be determined and the transaction value in respect of the imported items is to be accepted as ALP. 7.5 So far as the ALP in respect of raw material is concerned, the assessee has adopted the RPM. The TPO has rejected the method adopted by the assessee i.e., RPM for determining the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that the gross profit margin of the assessee has been worked out to 3.26 per cent whereas the GP of the comparable companies have been worked out at 6.39 per cent. As per the final working given by the assessee, the GP margin of the assessee has been worked to 3.26 per cent whereas that of the comparable companies at 1.89 per cent. 9. The TPO has observed that the assessee was unable to substantiate how the purchase price for the raw materials, consumables, tools and equipments are a negotiated price or the market price. It is not disputed that AE is making sales of similar items to uncontrolled parties also but the assessee could not show the purchase bill of the third party. The TPO finally decided that the TNMM method which in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival submissions of the parties and perused the relevant material on record. The Id counsel of the assessee submits that the assessee is basically engaged in the business of selling Wind Turbines in India and the appropriate method is to be adopted for determining of the ALP is RPM method. It is argued that the assessee has provided sufficient data to support the said method but the same was rejected. It is argued that apart from the importing the spares, consumables, of wind turbines, the assessee has to do other exercise of installation and commissioning of wind turbines and set up the plant etc. It is argued that the loss reflected was due to the activities carried in India. How the loss is nothing to do with the sale of the imported tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. We have heard the rival submissions. The Id counsel of the assessee submitted that now this issue stands covered in favour of the assessee by the decision of the Hon ble Supreme Court in the case of TRF Ltd. v. CIT [2010] 190 Taxman 391 as well as by the decision of the Hon ble iurisdictional High Court in the case of DIT (International Taxation) v. Oman International Bank Saoq [2009] 313 ITR 128 (Bom.). The Id DR fairly conceded that the issue is covered in favour of the assessee as submitted by the Id counsel of the assessee. We, accordingly, respectfully following the precedents cited above delete the addition made by the Assessing Officer. 14. Now, we will take up the appeal for assessment year 2003-04 in ITA No. 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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