TMI Blog2014 (5) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... company after taking into consideration the DEPB benefit as a part of its turnover and to delete the addition made by way of TP adjustment if the difference between the profit margin so computed and the average profit margin of the comparables is found to be within the safe harbor limit of 5% as claimed by the assessee – Decided in favour of Assessee. Disposal of appeal of the CIT(A) u/s 143(3) of the Act – Directions issued by DRP u/s 144C of the Act – Held that:- The order of assessment passed u/s 143(3) of the Act in pursuance of the directions of the DRP is not considered as an order appealable before the CIT(A) w.e.f. 1-10-2009 as per the amendment made in the relevant provisions of section 246-A of the Act by the Finance (No.2) Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture and export of bathrobes. The return of income for the year under consideration was filed by it on 31-10-2007 declaring total income of Rs. 1,30,65,646/-. In the said year, the assessee had exported bathrobes to its AE located in Italy for an amount of Rs. 18,55,51,843/-. In the TP study report filed by the assessee, these international transactions were bench marked by the assessee by following CUP method. It was stated that 85.52% of the total sales of the assessee were to its AE while the remaining sale/export were made to non-AEs. It was stated that the export to non-AE was mainly comprising of export of bathrobes to Main Knitting Inc. U.S.A at a unit price of US $ 6.55 while the sale price charged by the assessee for export of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le proceeds to determine its profit margin. Accordingly, applying the average profit margin of 15.32% of the comparabled to the total cost of the assessee related to its exports to AE, the arm's length value of the exports of bathrobes of the assessee to its AE was determined by the TPO at Rs. 20,16,52,539/- as against the value of Rs. 18,55,51,843/- charged by the assessee and the difference of Rs. 1,61,00,696/- was treated as TP adjustment required to be made in the case of the assessee. 4. In the draft assessment order, the A.O. proposed to make the addition on account of TP adjustment in respect of the international transactions of the assessee company with its AE involving export of bathrobes as determined by the TPO. On receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s found by the learned CIT(Appeals). Before us, nothing has been brought on record to controvert or rebut this finding recorded by the learned CIT(Appeals) and this being so, we find no justifiable reason to interfere with the decision of the learned CIT(Appeals) that the DEPB benefit received during the year under consideration should be considered as part of the turnover of the assessee for working out the profit margin to make the comparison of like to like and similar to similar. Since the profit margin of the assessee after taking into consideration the DEPB benefit as part of its turnover comes to 12.30% as against the average net profit margin of 13.05% of the comparables which is within the safe limit of 5%, we find ourselves in agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing before us, the ld. D.R. has raised a preliminary objection that the order passed by the A.O. u/s 143(3) of the Act as per the direction of the Dispute Resolution Panel was not an appealable order before the ld. CIT(A) and the ld. CIT(A) thus had no power to entertain and dispose of the appeal filed by the assessee against the said order. He has contended that the impugned order passed by the ld. CIT(A) disposing of the appeal filed by the assessee against the order passed by the A.O. u/s 143(3) of the Act in pursuance of the directions of the DRP thus is liable to be quashed. The ld. Counsel for the assessee, on the other hand, has not raised any material contention to meet this preliminary objection raised by the ld. D.R. 8. Af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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