9911796707
TMI Blog2012 (10) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... 77,310/- on account of warranting provision, Rs. 1,75,94,836/- on account of provision for sale promotion and Rs. 6,23.30,710/- on account of Transfer Pricing additions. The additions made are wholly illegal, untenable, and on erroneous grounds. The entire addition of Rs. 8,11,02,856/- is prayed to be deleted. 5.0 That the order of assessment including that of the TPO is bad in law. 6.0 That the additions of Rs. 6,23,30,710/- made by the Assessing Officer/TPO under provision of 92CA of the Income Tax Act is bad in law. 7.0 That the A.O./TPO have grossly erred in making additions amounting to Rs. 6,23,30,710, based on his erroneous calculations to arrive at the Arm's Length Price of the International transactions of the assessee. 8.0 That the A.O/TPO have grossly erred in law for not giving benefit on account of same Harbour Rule under Section 92C of the Income Tax Act 1961 which allows adjustment (+) Plus, (-) Minus 5% to the Arm's length price determined by the TPO and that price on which the transactions have actually been made. 9.0 That the Ld. A.O./TPO have grossly erred in law and on facts and in circumstances of the appellant's case in making adjustments in the Arm's len ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961. 17.0 That the TPO should not have brought the sales of the CPO-Local into the TP net and thereby advised an adjustment of 7.41% of these sales. The TP adjustment of Rs. 5,82,42,973/- (i.e. 7.41% of Rs. 78,73,54,562/-) the international purchases from the AE's is glaringly bad, without any just cause and outside the scope of the provisions of Transfer Pricing, as there are no such purchases or international transactions in the CPO-Local segment. Thus the operating revenue of the CPD-local division should not be subject to any adjustment on account of any alleged arm's length price. 18.0 The AO/TPO grossly erred in law in suggesting a mark up on the local transactions which against the accepted history of the assessee's case. That the mark up on the CPO-local segment is totally erroneous and outside the purview of transfer pricing provisions especially when the same has been accepted in AY 2002-03, AY 2003-04 and AY 2004-05 in the assessee's own case and no appeal has been filed in AY 2004-05 on this issue by the revenue authorities. 19.0 The TPO has grossly erred in rejecting the segment wise analysis done by the assessee and the computation of the segment wise operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er consideration to warrant a diametrical shift of the position from the earlier years. 30.0 That the TPO failed to appreciate the fact that the assessee was not into the business of providing "advertisement services" to its AEs. He also overlooked the fat that all expenses incurred on advertisement are booked as "operating expenses" under the head sales, advertisement and product promotion expenses. The receipt by the assessee was nothing but a partial compensation or reimbursement of part of the cost of advertisement met by its AE, whose products the assessee was selling. 31.0 The TPO failed to appreciate the fact that the assessee was not the "brand owner", therefore by incurring expenditure on advertisements, the brand image generated belonged to the AE or parent company of the assessee for which the assessee was being compensated by its AE. 32.0 That the proposed adjustment of Rs. 6,23,30,710/- by the AO/TPO in orders are illegal, bad in law for determination of ALP on the international transaction and may please not be confirmed. 33.0 That the A.O. failed to appreciate the appellant's pleas against the order of the TPO and requested not to propose adjustments as suggested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the record carefully. It is imperative upon us to take note of the order passed by Ld DRP. It read as under:- "Directions u/s 144C(5) of the Income Tax Act, 1961 The above assessee has filed objections u/s 144C(2)(b) of the Income Tax Act, 1961 (the Act) on 28.01.2010 in respect of the draft assessment orders served on the assessee on 02.01.2010 proposed by the ACIT, Circle-14 (1), New Delhi. We have gone through the Draft Assessment order. We have also heard the Authorized Representative (AR) and have considered the objections of the assessee carefully. After considering the same, we are of the opinion that the Draft Assessment order proposed by the Assessing Officer is to be approved. Directions The Assessing Officer is directed to complete the assessment order as proposed in the Draft Assessment order. Sd/- (S.G. Joshi) Member Sd/- (Hari krishan) Member Sd/- (Virendra Singh) Member" From the perusal of this order it nowhere suggest that Ld DRP has considered the facts and circumstances of the case, nature of dispute and what is the defence. The order is running into few lines and does not disclose the mind applied by the Ld Adjudicators. Thus it can safely be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support of their conclusions by judicial and quasi-judicial authorities when exercising initial jurisdiction is essential for various reasons. First, it is calculated to prevent unconscious, unfairness or arbitrariness in reaching the conclusions. The very search for reasons will put the authority on the alert and minimise the chances of unconscious infiltration of personal bias or unfairness in the conclusion. The authority will adduce reasons which will be regarded as fair and legitimate by a reasonable man and will discard irrelevant or extraneous considerations. Second, it is a well-known principle that justice should not only be done but should also appear to be done. Unreasoned conclusions may be just but they may not appear to be just to those who read them. Reasoned conclusions, on the other hand, will have also the appearance of justice. Third, it should be remembered that an appeal generally lies from the decision of judicial and quasi-judicial authorities to this court by special leave granted under article 136. A judgment which does not disclose the reasons will be of little assistance to the court." The same view was reiterated in Ajantha Industries v. CBDT [1976] 102 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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