TMI Blog2017 (3) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... pricing issue is accordingly remitted back to the file of Transfer Pricing Officer to pass afresh order as per law after including these two entities Correctness of Section 43B disallowance of Sales Tax payment - Held that:- The assessee has sufficiently made its case to have paid in advance the sales tax sum in question in said earlier assessment years without claiming any deduction. It pleaded before the Assessing Officer that the Commissioner (appeals) concerned had declined its challenge to the impugned sales tax liability thereby crystallizing the same in the impugned assessment year making it to record necessary entry in P&L account. Learned Departmental Representative fails to dispute this factual position. We accordingly direct t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te consequential transfer pricing adjustment. 4 The ld. AO erred in law and on facts in disallowing entire management charges and in given facts and circumstances, the disallowance ought not to have been made. 5 The ld. AO erred in law and on facts in invoking provisions of section 92C(3) of the Act without taking into account various information and documentation maintained by the appellant as per Rule 10D of the Income Tax Rules, 1962 ('the Rules') and rejecting the transfer pricing documentation without providing cogent reasons. 6 The ld. AO has erred in law and on facts in disregarding and altering the methodical search process undertaken by the appellant to benchmark international transaction under the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant has not claimed any deduction under section 43B of the Act in connection with such sales-tax paid in the year of payment and the same was shown as advances in the balance-sheet of the Appellant. As the liability has been crystalised during the year under consideration, the same has been charged off to the Profit and Loss Account and claimed as deduction. Grounds relating to disallowance of sales tax payment u/s 43B of ₹ 916,852 14 The learned AO failed to appreciate the fact that the sales-tax paid by the Appellant was under dispute, accordingly, the same was not claimed as deduction under section 43B of the Act, on payment basis in the years of payment. 15 Without prejudice to the foregoing, the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. IAI Industries and M/s. Victor Gaskets Ltd. in the array of comparable as excluded by the lower authorities. 5. The assessee company manufactures tubes, automotive components and tubular products. It admittedly entered into international transactions with its overseas associate enterprises. The said transactions are in the nature of payment of management fee as well as in manufacturing segments. The assessee chose four comparables i.e. M/s. IAI Industries, JNS Instruments Ltd., Venus Industrial Corporation Ltd. and Victor Gaskets Ltd. in order to justify the above transactions to have been executed at arm s length price. The Transfer Pricing Officer s order rejected all of them. He opined qua the first entity M/s. IAI Industry that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer authorities quote assessee s manufacturing activity of braking assembly to exclude the two comparables in question. We further notice that the assessee had employed the transactional net margin method (TNMM) to benchmark its transactions. Page 284 of the paper book indicates the assessee s profile as follows: BIL operates under Fluid Carrying System segment of TI Automotive Group. Under the Fluid Carrying Systems Segment, TI Automotive Group Designs and manufactures fluid carrying systems that include fuel lines, brake lines, tank top lines, heated SCR lines, vacuum booster lines, etc. BIL manufactures weld tubes (single wall and double wall copper coated steel tubes), brake and fuel lines, power benders and other accessories ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scapital Investment Advisors (India) (P.) Ltd. vs. DCIT to observe that the lower authorities have erred in excluding assessee s above two comparables namely M/s. IAI Industries and Victor Gaskets (supra). This transfer pricing issue is accordingly remitted back to the file of Transfer Pricing Officer to pass afresh order as per law after including these two entities. Shri Soparkar states at this stage that assessee s all pleadings pertaining to this transfer pricing issue need not be adjudicated any more. We appreciate this fair stand and conclude that assessee s all remaining substantive grounds are rendered infructuous at this stage. 10. This leaves us with assessee s last substantive ground assailing correctness of Section 43B disall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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