TMI Blog2023 (5) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... dry balances written back which was considered as non-operating income by the Ld. TPO without providing an opportunity to the assessee. AR also contended before us that the loan processing charges was considered as operating expenses by the Ld. TPO without providing an opportunity to the assessee. Similar treatment was also given in inventory valuation and adjustment on account of extraordinary cost and capacity adjustment wherein the assessee was not provided any opportunity to represent before the Ld. TPO. We therefore find that plea of the Ld. AR that matter may be remitted back to the file of the Ld. TPO deserves consideration. We consider it deem and fit to remit the matter back to the file of the Ld. TPO and thereby the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 14/7/2016. The assessee s Authorized Representative appeared on 2/8/2016 and furnished the information called for. Due to change in the incumbent, notice U/s. 142(1) r.w.s 129 of the Act was issued on the assessee on 25/10/2017. In response to the notice, the assessee s Representative attended before the Ld. AO and produced the books of accounts and submitted the details called for from time to time. The Ld. AO on verification of the Form 3CEB furnished by the assessee found that the assessee3 company has entered into international transaction with its Associated Enterprises [AEs] aggregating to Rs. 236.04 Crs during the AY 2014-15. The Ld. AR therefore made a reference to the Transfer Pricing Officer [TPO], Hyderabad after taking necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. AR submitted that the Ld. TPO rejected the comparables without assigning any valid reasons as detailed in para 6 of the Ld. TPO order, which is reproduced below: 6. On going through the TP document it is seen that the search process is not in conformity which the TP regulations as also the choice of the filters which resulted in selection of inappropriate comparables. In view of the provisions of section 92C(3), 92C(4), the TP analysis and documentation of the tax-payer is hereby rejected. Further, Ld AR submitted that the Ld. TPO provided the CD containing the independent search of comparables carried out by the Ld. TPO along with the order copy and has not provided any opportunity to the assessee to rebut the same. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Celebrity Fashions Ltd 0.96 6. Samtex Fashions Ltd 3.21 7. Kamdgiri Fashion Ltd 5.40 Arithmetic Mean 1.17 6. As per the TP documentation study of comparable company selected by the assessee, the Arithmetic Mean of the ALP is 1.17%. However, the Ld. TPO has selected the following comparables: Sl no Company Name Unadjusted Margins AY 2014-15 (%) 1. Nahar Spinning Mills Ltd 13.47 2. Lovabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without providing an opportunity to the assessee. Similar treatment was also given in inventory valuation amounting to Rs. 1,04,45,656/- and adjustment on account of extraordinary cost and capacity adjustment wherein the assessee was not provided any opportunity to represent before the Ld. TPO. We therefore find that plea of the Ld. AR that matter may be remitted back to the file of the Ld. TPO deserves consideration. In view of the above discussions, following the principles of natural justice, we consider it deem and fit to remit the matter back to the file of the Ld. TPO and thereby the assessee may be provided opportunity to make its submissions and rebut the TP documentation adopted by the Ld. TPO. Accordingly, the grounds raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
