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2022 (12) TMI 378 - AT - Income TaxTP Adjustment - rejecting the Internal Transactional Net Margin Method (TNMM) as Most Appropriate Method (MAM) - only reason for rejection of Internal TNMM by the ld. DRP is non-availability of date-wise analysis of comparison of AE transactions vis a vis non-AE transactions - main objections raised by the assessee before the ld. DRP was that Internal TNMM should be the most appropriate method in the instant case which was rejected by the ld. TPO - HELD THAT:- The date wise analysis for comparison of AE and non-AE transactions would be relevant only when CUP is adopted as MAM. They are certainly not relevant when TNMM is adopted as MAM. Moreover, with regard to the FAR analysis between AE and non-AE, we find that there is absolutely no difference with Functions performed or Assets employed. With regard to the Risks assumed, the ld. DRP itself admits that in respect of transactions with AE, the assessee is having very minimal and low risk. The turnover with non-AE is much greater than turnover with AE which is evident from the workings available - Hence, the entire FAR is also duly complied with by the assessee in the instant case. Even with lower risk that AE segment as accepted by the ld DRP is having, as evident from the segmental workings available we find that assessee had made higher margins with AE as compared to non-AE transactions. Hence, certainly, the assessee’s international transaction with AE using Internal TNMM as the MAM is at arm’s length, which has to be accepted in the instant case. We hold accordingly. Hence, the ground Nos. 2-6 raised by the assessee are allowed. Inclusion of five comparables chosen by the assessee by adopting external TNMM as the Most Appropriate Method -External TNMM method adopted by the ld. TPO - As going by the broad functional comparability we hold that even the five comparable companies which were rejected by the ld. DRP ought to be included in the final list of comparables. By this process, effectively all the 12 comparables chosen by the assessee, on without prejudice basis, for applying External TNMM gets approved. Hence, there is no scope for making any adjustment to arm’s length price even if External TNMM is adopted in the instant case. Accordingly, the ld. TPO is hereby directed to delete the entire transfer pricing adjustment made in the instant case. Hence, the ground No. 7 & 8 raised by the assessee are also allowed. Deduction in respect of employee’s contribution to provident fund and ESI - Contribution remitted beyond the due dates but before the due date of filing of the income tax returns u/s.139(1) - HELD THAT:- This issue is no longer res integra in view of the decision of CIT vs. Ghatge Patil Transport Ltd.[2014 (10) TMI 402 - BOMBAY HIGH COURT] wherein the employee’s contribution to PF even if remitted before the due date of filing of return becomes an allowable deduction u/s.43B of the Act. Respectfully following the same, the ground No.9 raised by the assessee is allowed. Levy of interest u/s.234A - HELD THAT:- As the return of income has been filed on 28/11/2015 which is well before the due date prescribed u/s.139(1) in respect of transfer pricing cases. Hence, there is no delay at all. Accordingly, there cannot be any chargeability of interest u/s.234A. MAT credit u/s.115JAA - AO is hereby directed to grant MAT credit u/s.115JAA of the Act in accordance with law.
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