TMI Blog2018 (4) TMI 1816X X X X Extracts X X X X X X X X Extracts X X X X ..... - ITA No. 1385/Mum/2014 - - - Dated:- 12-4-2018 - Sri Mahavir Singh, JM And Sri Manoj Kumar Aggarwal, AM Revenue by: Saurabh Deshpande, DR Assessee by: S. Sriram Mayank Thosar, AR ORDER Mahavir Singh, JM: This appeal by the Revenue is arising out of the order of Commissioner of Income Tax (Appeals)-15, Mumbai [in short CIT(A)], in appeal No. CIT(A)-15/Arr.219/13-14 dated 06.12.2013. The Assessment was framed by the Asst. Commissioner of Income Tax, Ward 8(3), Mumbai (in short 'ACIT') for the A.Ys. 2008-09 vide order dated 31.01.2012 under section 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in this appeal of Revenue is against the order of CIT(A) in directing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed the order u/s 92CA(3) of the Act making the adjustment of ₹ 3,87,03,306/- in relation to the international transactions entered by the assessee company with its associated enterprises. Before the TPO the assessee contended that the adjustment to the transfer price should be restricted to the value of international transaction i.e. transactions entered into by the assessee with its AEs and not in relation to the transactions entered into by the assessee with third parties. The ITAT in assessee's own case for A.Y. 2004-05 had held that any Transfer Pricing adjustment should be restricted to the value of international transaction alone, merely because the AO had appealed against the order of the ITAT before the High Court, ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s whether Transfer Pricing adjustment should be restricted to 'International Transactions' alone, or would it be made to the entire business operations of the assesse. The assesse submits that this issue is covered in the assessee's own ease for A.Y. 2004-05 as well as subsequent years. He explained that identical question arose before Tribunal in the case of the assessee for A.Y. 2004- 05 in ITA No. 5644/Mum/2008 order dated 23.02.2010 Tribunal accepted with the contention of the assesse that any Transfer Pricing Adjustment should be restricted to the value of international transaction alone. In holding so, the Tribunal observed as under: 13. We have considered the rival submissions carefully. We partially agree with the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TNMM by working out the average net profit. Further, the adjustment should be worked out on a very simple basis by reducing the net profit declared by the assessee from the gross sales and then divide the same in the controlled and uncontrolled sale and apply the net profit rate. Needless to say that assessee should be given adequate opportunity of hearing. 6. In the remand proceedings, the TPO, vide order dated 29.08.2011 worked out Transfer Pricing adjustment at nil by applying the difference in PLI to the value of international transaction alone. 7. Similarly, identical issue arose in the case of the assessee for A.Y. 2006-07. The ITAT allowed the appeal of the assessee by giving following reasoning:- 7. The second objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ombay)], as under: 6. The question as proposed by the revenue does not seems to arise from the impugned order of the Tribunal nor is the method of determination of ALP on application of TNMM arriving at the margin of 4.79% is disputed before Tribunal or before us. We are unable to understand the grievance of the revenue as formulated in the proposed question the respondent-assessee has not challenged the application of TNMM and arriving at the margin of 4.79% arrived at by the TPO to determine ALP. The grievance of the respondent-assessee before the Tribunal is only with the margin of 4.79% being applied in respect of all it's sales and not restricted to the international transactions entered into by the respondent- assessee with it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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