TMI Blog2015 (4) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... ee not raised in return. We are of the considered opinion that, since the deduction claimed by the assessee which has been left out at the time of filing return has not been considered at all, in the interest of justice, it would be just and proper if the issue is remitted back to the Assessing Officer to consider the claim of assessee and allow the same, if the assessee is entitled to it. - Decided in favour of assessee for statistical purposes. Adjustment of TP - international transactions do not satisfy the arm's length principle envisaged under the Act - Held that:- Under-utilization of production capacity in the initial years is a vital factor which has been ignored by the authorities below while determining the ALP cost. The TP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the AY under consideration on 30-09-2008 declaring a loss of ₹ 16,03,67,744/-. The case of the assessee was selected for scrutiny and notice u/s.143(2) of the Act was issued to the assessee on 12-08-2009. Since the assessee had certain international transactions with Associated Enterprise [AE], reference was made to Transfer Pricing Officer [TPO] to determine the Arm's Length Price [ALP]. During the course of assessment proceedings, the assessee vide letter dated 15-12-2011 claimed the deduction of ₹ 3,14,10,819/- on account of foreign exchange gain on fixed assets. As per the contention of the assessee, this amount has already been reduced from the cost of fixed assets while computing the depreciation under the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, in the report, the TPO enhanced the adjustment from ₹ 7,59,39,334/- to ₹ 11,39,39,334/-. The reason for modifying the adjustment as stated by TPO was that the actual cost was wrongly taken as ₹ 1,11,50,23,385/- instead of ₹ 1,15,30,23,385/-. The DRP rejected all the objections raised by the assessee and confirmed the findings of TPO. On the basis of the directions of the DRP, the Assessing Officer completed the assessment vide impugned order dated 26-09-2012 and made addition of ₹ 7,59,39,334/- on account of difference in ALP. The assessee aggrieved against the assessment order has filed present appeal before the Tribunal and has raised the following grounds in appeal: 1. That the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Prasun Kumar Maiti, appearing on behalf of the assessee submitted that the period relevant to the AY under consideration was the first year of production. The assessee had utilized only 15% of its production capacity. Since the production capacity of the assessee was under-utilized, the overhead fixed cost was high thus, the assessee suffered loss in the first year of its operation. The Ld.AR submitted that despite the fact that the assessee had started its commercial production only six months back, the company was able to restrict its loss at 3.44% on sales. In the subsequent AYs, the company started earning profits and in the FY.2010-11, the assessee has operating profit of 6.62%. The ld.AR contended that the TPO and the DRP has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mistake by filing revised return, as the time period for filing revised return had already elapsed by then. 5. On the other hand, Shri Anirudh Rai, appearing on behalf of the Revenue vehemently supported the order of the Assessing Officer and the findings of the TPO/DRP. The ld.DR submitted that the assessee for the first time raised the ground of under-utilization of its production capacity before the DRP. The assessee was given ample opportunity to represent its case during the pendency of proceedings before DRP. Report was sought from TPO on the objections raised by the assessee. The TPO gave detailed report dated 01-06-2012. Thereafter, on the directions of the DRP, the Assessing Officer passed order. The ld.DR contended that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Goetze India Ltd. v. CIT [2006] 284 ITR 323. 8. In the aforesaid decision, the Hon'ble Apex Court has held that if the deduction is not claimed in original, the Assessing Officer cannot entertain claim for deduction otherwise than in a revised return. Further, the Hon'ble Court observed that the issue is limited to the power of the Assessing Officer and does not impinge on the power of the Income Tax Appellate Tribunal u/s.254 of the Income Tax Act, 1961. 9. The Hon'ble Bombay High Court in the case of CIT v. Pruthvi Brokers Shareholders (P.) Ltd. [2012] 349 ITR 336 after considering the judgments of the Hon'ble Apex Court in the case of Goetze India Ltd. (supra) and National Thermal Power Co. Ltd. v. CIT [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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