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2016 (7) TMI 242 - ITAT PUNE

2016 (7) TMI 242 - ITAT PUNE - TMI - Transfer pricing adjustments - Grant of adjustment on account of under capacity utilization - Held that:- A perusal of order dated 28-10-2011 passed by TPO u/s.92CA(3) of the Act shows that the TPO has not touched upon the issue of capacity under utilization adjustment claimed by the assessee. The Commissioner of Income Tax (Appeals) in the impugned order for assessment year 2008-09 in para 2.2.4 to 2.2.5 has directed the Assessing Officer/TPO to grant the ad .....

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ent is to be granted to the assessee. Therefore, we deem it appropriate to remit the file back to TPO for deciding the issue afresh by passing speaking order. The TPO shall decide the issue after considering the facts of the case, documents on record and in the light of decisions of Tribunal. The appeal of the Department for the assessment year 2008-09 is accordingly allowed for statistical purpose. - ITA No. 1797/PN/2013, ITA Nos. 1973 & 1974/PN/2013 - Dated:- 18-4-2016 - SHRI R.K. PANDA, AM AN .....

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assessee is a 100% subsidiary of Schaeffler KG Germany. The assessee is engaged in the manufacturing of roller bearings, linear guides bearings systems and engine components for various automobile companies. During the impugned assessment years the assessee entered into various international transactions with its Associated Enterprises (AE). For benchmarking the same the assessee adopted Transactional Net Margin Method (TNMM) in assessment year 2008-09. In respect of international transactions i .....

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NMM Import of finished goods 51,48,64,483 TNMM Provision of sale and sale services 1,16,05,166 TNMM Payment for procurement 34,27,37,742 TNMM IT & Communication cost 1,90,56,520 TNMM Interest 1,60,43,876 TNMM Reimbursement of project cost 19,91,428 TNMM Reimbursement of expenses 2,18,88,609 TNMM Total 1,42,67,32,320 Assessment Year 2009-10 Nature of Transaction Amount (Rs.) Method used Import of raw material 72,94,72,803 TNMM Import of traded goods 56,71,27,900 TNMM Export, manufactured good .....

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s Reimbursement of expenses received 49,950 Actuals Total 1,61,33,11,882 Since, there were huge international transactions with AE in the impugned assessment years, the Assessing Officer referred the same to Transfer Pricing Officer (TPO) for verification of correctness or otherwise of ALP of these transactions. The TPO vide order dated 28-10-2011 rejected the benchmarking of international transactions done by the assessee with its AE and made upward adjustment of ₹ 19,97,51,177/- in asses .....

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gned order common for assessment years 2008-09 and 2009-10 partly allowed the appeal of the assessee by accepting adjustment on account of under capacity utilization in both the assessment years. The Commissioner of Income Tax (Appeals) rejected the contentions of the assessee in respect of other issues raised by the assessee in assessment year 2009-10. Against the findings of the Commissioner of Income Tax (Appeals), the Revenue is in appeal assailing the under capacity utilization adjustment g .....

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given detailed findings on capacity utilization. The ld. DR prayed for reversing the findings of Commissioner of Income Tax (Appeals) in respect of under capacity utilization adjustment granted to the assessee. The ld. DR made an alternate prayer that the matter may be remitted back to the file of Assessing Officer/TPO for reconsidering the issue relating to the under capacity utilization adjustment. The ld. DR further submitted that the Commissioner of Income Tax (Appeals) in assessment year 20 .....

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ls) in granting adjustment on account of capacity under utilization. The ld. AR submitted that the capacity utilization in the case of assessee was 35.42% whereas capacity utilization in case of comparable company was 81.63%. To substantiate his claim the ld. AR referred to page 459 of the paper book. The ld. AR contended that the assessee had undertaken substantial expansion program which resulted in under utilization of capacity. The TPO after verifying these facts allowed adjustment for capac .....

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riston Thermo India Ltd. Vs. DCIT in ITA No. 1455/PN/2010; iii. Tasty Bite Eatables Limited Vs. ACIT in ITA No. 1682/PN/2011; iv. ACIT Vs. Fiat India Pvt. Ltd. 2010-TII-30-ITAT-Mum-TP v. Mando India Steering Systems Private Limited Vs. ACIT in ITA No. 2092/Mds./2012. 5. In respect of assessee s appeal for the assessment year 2009-10 the ld. AR submitted, that the Commissioner of Income Tax (Appeals) in impugned order has erred in observing that no written submissions were filed for the assessmen .....

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) before the passing of order on 19-08-2013. However, the Commissioner of Income Tax (Appeals) has failed to take the same on record. The ld. AR prayed for remitting the matter back to Commissioner of Income Tax (Appeals) for considering the detailed written submissions and thereafter pass the order. The ld. AR in support of his contentions placed on record a copy of E-mail through which written submissions were allegedly sent to the counsel for the assessee for filing it before the Commissioner .....

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ilization to the assessee by Commissioner of Income Tax (Appeals). A perusal of order dated 28-10-2011 passed by TPO u/s. 192CA(3) of the Act shows that the TPO has not touched upon the issue of capacity under utilization adjustment claimed by the assessee. The Commissioner of Income Tax (Appeals) in the impugned order for assessment year 2008-09 in para 2.2.4 to 2.2.5 has directed the Assessing Officer/TPO to grant the adjustment on account of the capacity under utilization on the basis of the .....

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he file back to TPO for deciding the issue afresh by passing speaking order. The TPO shall decide the issue after considering the facts of the case, documents on record and in the light of decisions of Tribunal. The appeal of the Department for the assessment year 2008-09 is accordingly allowed for statistical purpose. ITA Nos. 1797 & 1974/PN/2013 (A.Y. 2009-10) 7. The ld. AR of the assessee has submitted that the Commissioner of Income Tax (Appeals) has passed the impugned order for the ass .....

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