9911796707
TMI Blog2018 (10) TMI 1814X X X X Extracts X X X X X X X X Extracts X X X X ..... iles, especially car industry Hyundai Motors India. However, M/s Suprajit Engineering Ltd. engaged itself in a diversified business and catering to the needs of not only to 4-wheeler industry but also 2- wheeler automobile industries. Unlike the assessee-company, according to the Ld. counsel, it is not doing sales to Hyundai Motors India. M/s Suprajit Engineering Ltd. caters to the needs of almost all the automobile manufacturers, including Tata Motors, BMW, General Motors (India), Volkswagen, Ford India Ltd., etc. According to the Ld. counsel, M/s Suprajit Engineering Ltd. also supplies products to global and domestic 2-wheeler customers including TVS Motors, Hero Motorcycle & Scooter India, etc. According to the Ld. counsel, since the assessee-company supplies only to Hyundai Motors India, the profit margin is very low, whereas, M/s Suprajit Engineering Ltd. supplies to variety of automobile manufacturers, including 2-wheeler, the profit margin was more. M/s Suprajit Engineering Ltd. earns more profit in respect of the products supplied to 2-wheeler industries. According to the Ld. counsel, in respect of 2-wheeler industry M/s Suprajit Engineering Ltd. commands 18% operating marg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;) to M/s Suprajit Engineering Ltd. Therefore, the matter needs to be re-examined by the authorities below. Accordingly, the orders of the authorities below are set aside and the issue with regard to comparison of M/s Suprajit Engineering Ltd. as one of the comparable is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the issue afresh and refer the matter to the TPO for reconsideration. The TPO shall collect the details from M/s Suprajit Engineering Ltd. by issuing notice under Section 133(6) of the Act and find whether the segmental details are available and thereafter decide the issue afresh in accordance with law. It is needless to point out that the details and information collected by the TPO in exercise of his power conferred under Section 133(6) of the Act shall also be furnished to the assessee before placing any reliance on the decision making process. Thereafter the Assessing Officer / assessee shall follow the procedure as laid down in Section 144C of the Act. 5. The next issue arises for consideration is loss on foreign exchange fluctuation. 6. Shri S. Raghunathan, the Ld.counsel for the assessee, submitted that the autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 10. Shri S. Raghunathan, the Ld.counsel for the assessee, submitted that working capital adjustment needs to be made for the purpose of determination of arm's length price. According to the Ld. counsel, the co-ordinate Bench of this Tribunal in the case of Doosan Power Systems India Pvt. Ltd. v. DCIT in I.T.A. No.581/Mds/2016 dated 14.12.2016, found that such adjustment is a necessary one while computing Profit Level Indicator. Referring to interest, the Ld.counsel submitted that this issue was also considered by the co-ordinate Bench of this Tribunal in the assessee's own case for the assessment year 2013-14 in I.T.A. No.3195/Chny/2017 dated 03.05.2018. This Tribunal found that the basis for calculation of number of days of holding of inventory, receivables and creditors of the comparables viz-a-viz the assessee. For working out the rate of interest and calculating the capital adjustment, this Tribunal took 18.5% as PLRI of HDFC. This Tribunal found that actual interest paid was never considered by the assessee, therefore, the orders of the authorities below are confirmed. The Ld.counsel further submitted that since the assessee took HDFC PLRI at 18.5%, this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PM while giving effect to the order of the DRP, is pending before the Assessing Officer. In view of the above, the orders of the lower authorities are set aside and the matter is remitted back to the file of the Assessing Officer. The Assessing Officer shall reexamine the issue afresh in the light of the material available on record and thereafter decide the same afresh in accordance with law, after giving a reasonable opportunity to the assessee. 17. The next issue arises for consideration is downward adjustment on the entire transactions of the assessee instead of the transaction of Associated Enterprise alone. 18. Shri S. Raghunathan, the Ld.counsel for the assessee, submitted that while considering international transaction and determination of arm's length price, the Assessing Officer or the TPO shall consider only the transaction of the assessee with Associated Enterprise outside the country. In this case, according to the Ld. counsel, the Assessing Officer has taken entire transactions. Placing reliance on the order of this Tribunal in Yongsan Automotive India Pvt. Ltd. v. ACIT in I.T.A. No.357/Mds/2017 dated 16.11.2017, a copy of which is available at page 147 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
