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2021 (11) TMI 49 - AT - Income TaxTP Adjustment - determination of arm’s length price of specified domestic transaction (‘SDT’)involving purchase of raw materials by the assessee from its sister concern/AE - manner of application of CUP Method challenged - assessee has benchmarked the SDT with the ‘arithmetical mean rate’ at which the related parties sold the same product to independent buyers and TPO has benchmarked it by taking the ‘lowest/minimum rate’ at which the related parties sold the same product to independent buyers - HELD THAT:- As taxing statute must be strictly construed and, therefore, save and except the words and phrase expressly used or employed by the legislature, nothing more can be taken into account while interpreting any provision. Casus Omissus is not permitted. At the same time, it has to be kept in mind that the judicial/quasi judicial authorities are also not permitted to ignore or overlook the expression or words expressly used. There is no scope for intendment while interpreting a deeming provision of a taxing provision, particularly when the words employed are of precise meaning. The proviso to Section 92C(2), as it stood during the relevant year, clearly states that where more than one price is determined by the most appropriate method, the arm’s length price shall be taken to be the arithmetical mean of such prices. Hence, when the computation of arithmetical mean has been expressly set out in the said provision, this Tribunal is not permitted to ignore or overlook the said expression and read weighted average mean in its place. No force in the Ld. CIT, DR’s contention for use of weighted average mean as against arithmetical mean computed by the assessee. Revenue’s contention that when the assessee has accepted the draft assessment order, pursuant to the TPO’s order making the T. P. adjustment, by not filing objections before the DRP, resulted in automatic acceptance of the T.P. adjustment - As in the statute that if the assessee is not agreeable to the T.P. Adjustment which has been incorporated in the draft assessment order pursuant to the TP order, then the assessee has two alternative appellate routes viz., (a) to object to the draft order inter alia including the T P Adjustment before the DRP or (b) post passing of the final assessment order, prefer an appeal against the action of the TPO before the Ld. CIT(A). In the facts of the present case, the assessee has availed the alternate remedy and chose to challenge the action of the TPO before the Ld. CIT(A). Such action of the assessee of choosing to file appeal before the CIT(A) rather than the DRP cannot be objected to by the AO/Revenue nor does it in any manner tantamount to acceptance of the draft assessment order by the assessee. Taxability of power subsidy and VAT subsidy received by the assessee under the State Industrial Policy by way of revenue receipt - The incentive in the form of sales tax/VAT subsidy and power subsidy have been granted for setting up new units in the States of West Bengal which lagged behind in industrial development for development of industries and generation of employment opportunities. The object of the assistance was not to enable the assessee to run the business more profitably but encourage them to set up a new unit or expand the existing unit for overall economic development of the State and so we concur/endorse this finding of Ld CIT(A) on this issue to the same effect. We find that this particular issue is now no longer res integra in light of the decision in the case of CIT Vs Chaphalkar Brothers [2017 (12) TMI 816 - SUPREME COURT] wherein the Supreme Court after analysing the ratio laid down in their earlier judgments in the cases of CIT vs Rajaram Maize Products[2001 (8) TMI 13 - SC ORDER], M/s Sahney Steel & Press Works Ltd. vs. CIT [1997 (9) TMI 3 - SUPREME COURT] and CIT vs. Ponni Sugar & Chemicals Ltd.[2008 (9) TMI 14 - SUPREME COURT] held that the subsidies granted under the State Industrial Scheme to accelerate industrial development and generate employment in the State, is capital in nature - Decided in favour of assessee.
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