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TMI Blog2019 (6) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... bai, pertaining to the assessment year 2012-13. C.O. no.56/Mum./2019 (Arising out of Revenue's appeal in ITA no.897/Mum./2018 for A.Y. 2012-13) 2. At the outset, learned Counsel for the assessee, on instructions submitted, if the issue relating to claim for working capital adjustment as raised in the cross objection is decided in favour of the assessee, he would not contest the grounds raised in Revenue's appeal. Further, he submitted, in that eventuality, the other grounds raised in the cross objection viz. grounds no.2, 3 and 4, would not be pressed. Keeping in view the aforesaid submissions of the learned Authorised Representative, we proceed to adjudicate ground no.5 of the cross objection relating to claim of working capital adjus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of transfer pricing adjustment, the assessee preferred appeal before the first appellate authority. 4. Learned Commissioner (Appeals) granted partial relief to the assessee by excluding some of the comparables selected by the Transfer Pricing Officer. However, he did not allow assessee's claim of working capital adjustment. 5. The learned Authorised Representative drawing our attention to the transfer pricing study report, a copy of which is at Page-301 of the paper book, submitted that the assessee had provided for working capital adjustment, since, as per rule 10B(e)(iii) enterprise level differences in net margin of comparable companies has to be adjusted to factor in differences that have a material impact on net profit margin. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 519 (Pune Trib.); and v) Dongfang Electric (I) Pvt. Ltd. v/s DCIT, ITA no.2356/ Kol./2014, dated 27.03.2019. 6. In this regard learned Authorised Representative specifically drew our attention to the decision of the Tribunal, Kolkata Bench, in Dong Fang Electric India Pvt. Ltd. v/s DCIT (supra), to submit that parameters have been laid down for computing working capital adjustment. He submitted, the computation of working capital adjustment by the assessee may be verified by the Assessing Officer and the Transfer Pricing Officer keeping in view the aforesaid parameters laid down by the Tribunal, Kolkata Bench. 7. The learned Departmental Representative relied upon the observations of the Transfer Pricing Officer and learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of Dong Fang Electric India Pvt. Ltd. (supra) has been placed on record vide paper book Page no.-81. In view of the aforesaid, we direct the Assessing Officer/Transfer Pricing Officer to verify the computation of working capital adjustment made by the assessee and compute the margin of the comparables and determine the arm's length price of the international transaction. Accordingly, this ground is allowed. 9. Grounds no.6 and 7, being general in nature do not require adjudication. 10. In the result, cross objection is partly allowed. ITA no.897/Mum./2018) Revenue's appeal for A.Y. 2012-13 11. In grounds no.1,2 and 3 Revenue has challenged the decision of learned Commissioner (Appeals) excluding three comparables selected ..... X X X X Extracts X X X X X X X X Extracts X X X X
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