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TMI Blog2022 (12) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... ort the Act) for the AY 2008-09. 2. In this appeal there is a delay of 12 days in filing the appeal before the Tribunal. In this regard, the Ld. Authorized Representative (Ld. AR) brought our attention to the affidavit filed by Ms. LVN Madhavi D/o. L. Nageswara Rao, Director of the assessee-company and submitted that during the relevant period the Director, who is looking after the accounting and tax matter, was not available in India and therefore the appeal was filed beyond the prescribed time limit with a delay of 12 days. Therefore it was pleaded that the delay may be condoned. On perusal of the affidavit filed before the Tribunal as well as considering the submissions of the Ld. AR, we find that there is a reasonable and sufficient ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of appeal: "1. On the facts and in the circumstances of the case and in law, the Ld. AO/TPO erred in applying the provisions of transfer pricing when the appellant is eligible for the tax holiday under section 10A of the Act. 2. The Ld. CIT(A) is not correct in rejecting/modifying the claim for elimination of depreciation, the same being an extraordinary item, for calculation of Profit Level Indicator while making the comparability analysis with the comparables selected by the TPO. 3. The Ld. CIT(A) is not correct in rejecting the plea of the assessee to give relief for positive working capital adjustment of +3.76 as against the negative working capital adjustment made by the TPO/AO of (-)2.07. 4. The appellant craves leav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilization of full capacity of the assessee and accordingly not given effect to the extraordinary depreciation submitted by the assessee. Per contra, the Ld.CIT-DR submitted that the claim of extraordinary depreciation and its inclusion in the operating cost was never raised by the assessee before the TPO and only before the Ld. CIT (A). The Ld. CIT-DR relied on the orders of the Ld. Revenue Authorities. 6. We have heard both the sides and gone through the material available on record and the orders of the Authorities below. The first contention of the Ld. AR is the depreciation should not form part of the operating cost since the assessee has incurred huge capital additions and the depreciation should be considered as an extraordinary it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions relating to the services to Associated Enterprises (AEs). Therefore, the assets deployed in Bhogapuram Unit for the provision of such services to the AE and their corresponding cost therefore would be an important component of the operating cost for the services rendered. The Ld. CIT(A) in para 4.25 observed as follows: "4.25. As regards extraordinary depreciation, it was submitted that the depreciation for the subject year of Rs. 3,74,21,303/- was substantially higher to the depreciation claimed in the earlier year of Rs. 1,56,50,135/-. It was contended that the increase of 139% was extraordinary and such vast difference was has to be eliminated. It was also submitted that the extraordinary depreciation was Rs. 1,87,86,505/- ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erating cost and should be considered in the computation of ALP of the assessee. The Ld. CIT(A) has rightly considered the extraordinary depreciation and has recomputed the PLI of the assessee as follows: Operating Revenue Rs. 6,52,18,623 Operating Costs Salaries etc 2,74,08,638 Other Admn. Costs 1,05,31,298 (Rs.1,37,78,043 -Rs.32,46,745) Depreciation (Rs. 3,74,21,303 - Rs. 1,38,03,107) 2,36,81,196 Rs. 6,15,58,132 Operating Profit Rs. 36,60,491 OP / OC 5.95% 9. In view of the above, we find no infirmity in the order of the Ld. CIT(A) and Ground No.2 raised by the assessee is dismissed. 10. With respect to Ground No.3 regarding the working capital adjust ..... X X X X Extracts X X X X X X X X Extracts X X X X
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