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2016 (9) TMI 1321 - AT - Income TaxTPA - TNMM - comparability analysis - transaction of intra-group services - Held that:- This matter needs to be restored back to the file of the AO/TPO to examine whether the transaction of intra-group services are inextricably linked with the manufacturing and overall business activities carried out by the assessee. The primary onus would be on the assessee to provide necessary details and explain as to how these services provided by the AE can be subsumed or can be aggregated with the overall business activities. If it is found that all the transactions are to be aggregated then definitely under the TNMM and given the high profit margin of the assessee, no separate benchmarking would be required qua the intra-group services. In case, if it is found that these transactions needs to be separately benchmarked, then needless to say that, proper comparability analysis has to be carried out by following prescribed method under the Transfer Pricing provisions. With these directions, the issue of Transfer Pricing is set aside to the file of the TPO / AO for fresh and proper analysis after giving due and effective opportunity to the assessee to present its case properly. Adjustment to closing stock on account of CENVAT under section 145A - Held that:- DRP has referred to the fact that in AY 2006-07, the assessee has not pressed this issue. However, there cannot be an estoppel to the assessee to contend the issue if a proper adjustment is required to be made in accordance with the provision of section 145A. If the difference in the valuation of closing stock is on account of CENVAT amount and has been added to the closing stock, then same treatment has to be given in the opening stock. This principle has been upheld by the Hon’ble jurisdictional High Court. Accordingly, we set aside this issue to the file of the AO apply the principle laid down by the Hon’ble Bombay High Court in the case of CIT vs. Mahalakshmi Glass Works Private Limited (2009 (4) TMI 182 - BOMBAY HIGH COURT) and grant consequential relief to the assessee. Reconciliation on the basis of AIR information - Held that:- This matter should be restored back to the file of the AO for this year on the similar line of directions. We find that the addition has been made on account of un-reconciled ITS data based on AIR Information. This precise issue had come up for consideration before the Tribunal, wherein, the matter was set aside to the file of the CIT(A). In this year also, we set aside this issue to the file of the AO (because the matter has come through DRP route before us) and direct him to furnish all the requisite information to the assessee and after calling for the re-conciliation, the issue may be decided accordingly. Thus, these grounds are treated allowed for statistical purposes. Short-deduction of TDS - Held that:- Directions should be given to the AO for verifying the same and give the credit for TDS in accordance with the law. Accordingly, we direct the AO to examine this fact and to give credit for taxes on account of TDS after verification. Accordingly, the ground on this score is allowed for statistical purposes.
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