TMI Blog2016 (12) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... f transaction with non Associated Enterprises, Chapter X of the Act is not triggered to make adjustment to considerations received or paid unless they are Specified Domestic Transactions. The transaction with non-Associated Enterprises are presumed to be at arms length as there is no relationship which is likely to influence the price. If the contention of the Revenue is accepted, it would lead to artificial increase in the profits of transactions entered into with non Associated Enterprises by applying the margin at entity level which is not the object of Chapter X of the Act. Absence of segmental accounting is not an insurmountable issue, as proportionate basis could be adopted as done by the Delhi High Court in Keihin Panalfa Ltd. (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly states that no such submission was made on behalf of the Revenue. Thus we fail to understand how the present question arises from the impugned order of the Tribunal. 5 Be that as it may, Mr. Chhotaray, learned Counsel for the Revenue submits that identical question as raised herein had been admitted by this Court and in particular invited our attention to the following orders passed at the stage of admission : (a) Commissioner of Income Tax15 Vs. M/s Super Diamonds, Income Tax Appeal No.298 of 2013; (Order dated 16 February 2015); and (b) The Commissioner of Income Tax8 Vs. Global Jewellery Pvt. Ltd., Income Tax Appeal No.1395 of 2013. (Order dated 16 April 2015) 6 In both the above appeals we find that the question admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat two appeals had been admitted on the above issue were not pointed out. 8 Nevertheless, the distinction sought to be made by the Revenue is that the issue of non keeping of segmental accounts by the Assessee was not for consideration in the above cases which were dismissed, as in this case. 9 This very issue/question as raised herein was raised by the Revenue in Pedro Araldite Pvt. Ltd. (Supra). The question raised therein was as under : Whether on the facts and law the Tribunal was justified in directing AO/TPO to bench mark as AE transactions without appreciating (a) the Assessee itself in its transfer pricing study report (TPSR) has chosen entity level PLI to benchmark the AE transactions; (b) the Assessee had itself f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment in the absence of segmental accounts held that adjustments have to be restricted only to transactions with Associated Enterprises. It further held that where separate accounts are not available, then proportionate adjustments to be made only in respect of the international transactions with Associated Enterprises. 12 We are in respectful agreement with the view of the Delhi High Court in Keihin Panalfa Ltd. (Supra). One must not loose sight of the fact that the transfer pricing adjustment is done under Chapter X of the Act. The mandate therein is only to redetermine the consideration received or given to arrive at income arising from for International Transactions with Associated Enterprises. This is particularly so as in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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