TMI Blog2022 (2) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... due to the defective goods written off is not mentioned as separate item in the audited financials. TPO held there was no such extraordinary item in the audited financials and suitable adjustment to that effect with proper comparability and analysis is not possible. AO/TPO rejected the claim of adjustment of extraordinary expense - AR did not bring on record supporting evidence showing that the cost of goods returned cost of demurrages, etc. is to be considered as extraordinary expenses. Therefore, we find no infirmity in the direction of DRP which was followed by the AO in its final assessment order. Thus, the first issue raised by the assessee is dismissed. Treating the foreign exchange gain as operating revenue - foreign exchange fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. - ITA No. 2034/PUN/2019 - - - Dated:- 27-1-2022 - R.S. Syal, Vice President And S.S. Viswanethra Ravi, Member (J) For the Appellant : Nikhil S. Pathak For the Respondents : Piyush Kumar Singh Yadav ORDER Per S.S. Viswanethra Ravi, JM This appeal by the assessee against the final assessment order dated 14-10-2019 passed by the ACIT, Circle-5, Pune u/s. 143(3) of the Act for assessment year 2015-16. 2. The first issue raised by the assessee relating to extraordinary expenses to an extent of ₹ 1.70 crores. 3. The ld. AR submits that some raw material amounting to ₹ 1,70,00,000/- belonged to earlier concern which was returned back due to quality concerns and it was a loss to the assessee. The TPO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Considering the same the TPO held the amount of goods returned will not be expenses of extraordinary nature. Further, we note that the claim of extraordinary expense due to the defective goods written off is not mentioned as separate item in the audited financials. The TPO held there was no such extraordinary item in the audited financials and suitable adjustment to that effect with proper comparability and analysis is not possible. Thereby, the AO/TPO rejected the claim of adjustment of extraordinary expense. Before us, the ld. AR did not bring on record supporting evidence showing that the cost of goods returned cost of demurrages, etc. is to be considered as extraordinary expenses. Therefore, we find no infirmity in the direction of D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the board is essential whether or not the assessee opts for the safe harbour - in our considered opinion does not merit acceptance. Section 92CB unequivocally states that the arm's length price under section 92C or section 92CA shall be subject to safe harbour rules. It only means that if there is an eligible assessee, who has exercised option to be governed by the safe harbour rules in respect of an eligible international transaction after complying with the due procedure, then the determination of the ALP shall be done in accordance with the safe harbour rules in terms of section 92CB of the Act and ex consequenti, the application of other rules will be ousted. The sequitur is that where such an option is not availed, neither section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as withdrawn. 8. Regarding RPM as the most appropriate method for benchmarking traded goods. The TPO held the TNMM is the most appropriate method for benchmarking traded goods. 9. We note that the assessee in the trading segment by using RPM benchmarked the international transaction considering the difference of sale and purchase price. The AO/TPO asked the assessee why the TNMM should not be considered as appropriate method. It was submitted the RPM is the most appropriate method for trading business as it works as gross margin rather than net operating margin. The AO/TPO observed that the goods sold by the assessee and comparable companies should be same or similar for taking RPM as most appropriate method. The ld. DR vehemently opp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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