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2016 (7) TMI 1565 - HC - Income TaxTP Adjustment - Comparable selection - ITAT rejected three comparables Aptico Limited, Global, Procurement Consultants Limited and TSR Darashaw Limited as they were functionally dissimilar - HELD THAT:- Heard Revenue, and having perused Rule 10B(3)(ii) of the Income Tax Rules, 1962 read with Section 92 C of the Income Tax Act 1961 the Court is not persuaded to hold that the first issue urged gives rise to a substantial question of law requiring examination by the Court. Scope of the powers of the ITAT while hearing an appeal - point now urged by the Revenue is that if three of the nine comparables are to be excluded, then the ITAT ought to suo motu have required the TP adjustment exercise to be undertaken afresh by the TPO since the TP adjustment based on six comparables that were to some extent functionally dissimilar to the Assessee could not have reflected the correct picture as far as the determination of ALP was concerned - HELD THAT:- Admittedly, during the AY in question there was no provision in the Act permitting the Revenue to appeal against the inclusion or exclusion of a comparable by the TPO. which is affirmed by the DRP. While the Assessee had a remedy by filing an objection before the ITAT, the Revenue could not during the relevant AY, do so. It has been urged on the strength of the decision of this Court in Commission of Income Tax v. Jansampark Advertising and Marketing Limited [2015 (3) TMI 410 - DELHI HIGH COURT] that in such circumstances it is incumbent upon the ITAT to exercise suo motu powers and in the interest of justice direct the exercise of TP adjustment to be undertaken afresh. The Court is unable to agree with the above submissions. As rightly pointed out by the ITAT, the statutory scheme at the relevant time did not envisage permitting the Revenue to prefer an objection in the circumstances pointed out hereinabove. The circumstances under which certain observations were made by this Court in Jansampark (supra) concerned an inquiry to be undertaken in proceedings initiated under Section 147/148 of the Act in order to find out the genuineness of the creditors, their credit worthiness etc. There is no comparison with the facts on hand. The Finance Act, 2016 has is done away with the above provision of the Act that permitted the Revenue to file objections against the order of DRP. In the present case we are concerned with AY is 2010-11 when there was no such provision permitting the filing of cross objection by the Department. It was introduced by the Finance Act, 2012 and again removed under the Finance Act, 2016. Clearly, there is legislative policy governing the insertion of the said provision in Finance Act, 2012 and its deletion in Finance Act, 2016. This Court is not inclined to frame a question on the above issue urged by the Revenue.
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