TMI Blog2020 (2) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... Disallowance of E-connectivity charges - Tribunal has noted that there were no convincing arguments by the ld. Counsel of the assessee, hence, the ITAT had upheld the order of the authorities below. Now, since it is the contention of the ld. Counsel of the assessee, assessee s own case which was in favour of assessee on the said issue has not been considered, in our considered opinion, there is a mistake apparent from the record in the order of the Tribunal. Hence, on the conclusion of the decision of Apex Court in the case of Honda Siel Power Products Ltd [ 2007 (11) TMI 8 - SUPREME COURT] . Accordingly, we recall the order of the disallowance of e-connectivity charges. - MA No.461/Mum/2019 (Arising out of ITA No.1785/Mum./2016, MA No.462/Mum/2019 (Arising out of ITA No.2162/Mum./2017 And MA No.463/Mum/2019 (Arising out of ITA No.645/Mum./2015 - - - Dated:- 22-1-2020 - Shri Shamim Yahya, Accountant Member And Shri Ram Lal Negi, Judicial Member For the Assessee : Shri. Rajan Vora For the Revenue : Shri. V. Vinodkumar ORDER PER: SHAMIM YAHYA By way of these Miscellaneous Applications, assessee seeks rectification of mistake apparent from record u/s.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposition. 5. We find that the above issue was adjudicated by the ITAT as under:- 13. Upon hearing both the counsel and perusing the records we find that the reasoning given by the transfer pricing officer for change in the method of choosing the most appropriate method as CUP instead of the TNMM method adopted by the assessee is firstly rejection of assesses method by following reasoning. It is observed that the assessee had calculated OP/OC at entity level. The transaction cannot be compared at entity level as the Export of Finished Drugs to AE is only ₹ 5,08,97,858/- . Whereas, the assessee has calculated OP/OC for total Export of ₹ 33 Crores. Also in. the Annual Accounts of the assessee there is are no such segmental accounts. Thus in the Annual Audited accounts the break- up of the Export to AE and Non AE is not available. In the' Audited Annual Accounts the Segmental Results for Export and Local Sale is also not available. Therefore, the so called calculation of OP/OC taking into account the entire Export of ₹ 33 Crores is also not reliable. Thus here the important issue is that the Assessee is trying to camouflage the OP/OC of the small Export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As rightly noted by the transfer pricing officer there is readily available internal CUP in the form of local sales of the same products. The export sales with the associated enterprise of fixed doses form (FDF) viz. UCEREX 10mg, UCEREX 25mg 2YRTEC were also sold in local market with identical pharmaceutical contents CUP. The assessee has objected that there are differences in function assets risk (FAR) analysis in this regard. The assessing objection in this regard has been cogently dealt with by the transfer pricing officer and has been noted by the dispute resolution panel as under:- 5. Grounds of objection three and four are against the adoption of the CUP method by the TPO to benchmark the international transactions of export of FDFs. The assessee has contended that the functions performed in the export of FDFs to the AE and the sales of similar FDFs to the local third parties in India are different. Among the differences highlighted by the assessee are that in respect of local sales, the assessee is required to estimate the demand for FDFs in the market for the purposes of manufacture whereas while dealing with the AEs, it manufactures and supplies the FDFs in accorda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exports, claimed by the assessee, is arbitrary and without any basis. From the aforesaid facts, the DRP is of the view that the element of FAR analysis discussed above do not demonstrate any significant economic differences that would affect the price in the open market between the transaction of sale of FDFs to the AEs and the sale of identical FDFs to the local parties. 5.2 In its objections filed before the DRP on the issue of inappropriateness of the CUP method to its transactions, the assessee has pointed out the differences on the geographical markets wherein the two sets of transactions were undertaken. The TPO has analysed this objection and has observed that the product quality of the FDFs exported appears to be marginally superior and the regulatory regime being more stringent in the geographical location of the AE, the price charged to the AE should have been higher to that extent. However, in the CUP analysis, the price actually charged to the AE is found to be lower than that charged in the local sales made by the assessee. The DRP on such facts finds itself in agreement with the TPO that no discount would be available to the assessee on account of difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .S FDA regulation. 20. Our order as above shall apply mutatis mutandis for assessment year 2011-12 AY 2012-13. 6. We find that ITAT has passed a well reasoned order. The only mistake apparent from record is the word assessee used in place of authorities in second line of para 18 in the above order. Hence, the word assessee should be read as authorities in second line of para 18 of the above order. The ld. Counsel of the assessee has contended that ITAT finding is incorrect. He contends that various submissions and evidence has not been properly appreciated. By calling the factual finding as incorrect, the same cannot take the issue out of review being sought by the assessee. Furthermore, the various issues as mentioned above are finding of the fact by the Tribunal after considering the submissions and perusing the record. What the assessee is now seeking clearly review of the order not permissible u/s.254(2) of the IT Act. Hence, if according to the assessee, the order of the ITAT needs to be visited again or the evidences submitted need re-appreciation again in light of assessee s arguments, the same would amount to review of the matter not permissible u/s.254(2) of the I.T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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