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2018 (5) TMI 2090 - AT - Income TaxTP Adjustment - adjustment made on international transactions of the assessee with its Associated Enterprises - HELD THAT:- Hon’ble Apex Court has admitted an appeal filed by Revenue in the case of CIT vs. Firestone International P. Ltd [2016 (8) TMI 1285 - SC ORDER] against a judgment of Hon’ble Bombay High Court [2015 (6) TMI 1123 - BOMBAY HIGH COURT] affirming the view taken by the Tribunal that adjustments on arms length transactions had to be restricted to the value of international transactions with Associated Enterprises. However no stay was granted by Hon’ble Apex Court. Hence as on date the judgment of Hon’ble Bombay High Court, is operative DRP fell in error in giving a direction to do an upward adjustment on aggregate of international transactions of the assessee without restricting it to the proportion of such transactions with its Associated Enterprises. Such directions of the ld. DRP are set aside. Ground No.6 of the assessee stands allowed. Disallowance of custom duty and revenue loss - economic adjustment for custom duty adjustment and was not pressing for such adjustment on account of revenue loss - HELD THAT:- For making such adjustment, assessee should be able to demonstrate that higher import content was necessitated by some extraordinary circumstances which was beyond its control. Just because there is a difference in proportion of imports between comparables and the assessee would not by itself, in our opinion, warrant any adjustment on profits unless assessee is able to show some extraordinary circumstances which necessitated higher imports when compared to the selected comparables. Assessee in the case before us, has been unable to demonstrate that raw materials purchased after payment of custom duty was of a similar nature as purchased by the comparable entities and there was a substantial difference in custom duties and excise duties on such material. Thus, in our opinion, assessee was rightly denied the adjustment sought by it for custom duty on raw materials. Grounds Of the assessee stand dismissed. Carry forward losses from earlier assessment years being not allowed a set off while computing the income for the impugned assessment year - HELD THAT:- If the assessee had claimed set off of any brought forward loss from earlier years, which were determined in the regular assessment for such assessment years, then set off could be allowed. We direct the ld. Assessing Officer to look into this issue and provide, if required, appropriate relief to the assessee. Ground allowed for statistical purpose.
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