9911796707
TMI Blog2025 (3) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 143(3) r.w.s. 144C(3) of the Income Tax Act, 1961 [hereinafter referred to as "the Act"] by the Assessing Officer [hereinafter referred to as "AO"], incorporating the Transfer Pricing (TP) adjustments determined by the Transfer Pricing Officer [hereinafter referred to as "TPO"] under Section 92CA of the Act. Facts of the Case: 2. The assessee is engaged in the manufacture and sale of synchronous drain pumps used in washing machines and dishwashers. The assessee filed its return of income on 28.11.2017, declaring a business loss of Rs. 21,48,541/-. The case was selected for Complete Scrutiny under CASS, and notices were issued under Sections 143(2) and 142(1) of the Act. Since the assessee had international transactions with Asso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Appellant and the same needs to be benchmarked using combined transactions approach. Sales Commission 3. The TPO has erred in; i) Not appreciating that the Sales commission is closely linked to the other international transactions and should not be benchmarked separately; ii) Not appreciating that once the entity level margin is tested on the touchstone of ALP, it pre-supposes that the various components of income and expenditure such as sales commission considered in the process of arriving at the margin is also at ALP; iii) Not substantiating how the sales commission was singled out of the many transactions to be benchmarked separately; iv) Not appreciating that the methodology adopted to compute ALP of commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x gain/Loss as non-operating in nature while computing the operating margin. c. Treating Depreciation as part of cost and rejecting Cash PLI without appreciating that the Appellant is a new manufacturing company with high capital expenditure and depreciation allowance, when compared to the comparables; d. Without prejudice, if CASH PLI is not adopted, depreciation adjustment should be granted for excess depreciation of the Appellant. e. Incorrectly computing the margins of the comparables and the Appellant; 5. The lower authorities have erred in: a. Not making proper adjustment for enterprise level and transactional level differences between the Appellant and the comparable companies; b. Not recognizing that the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORATE TAX 8. The learned AO has erred in computing the total income without granting set off of brought forward business losses and unabsorbed depreciation. 9. The learned AO has erred in computing the tax liability without providing setoff of MAT credit available as per provisions of section 115JAA of the Act. 10. The learned AO has erred in levying interest under section 234B of the Act of Rs. 1,10,58,900/-. On the facts and in the circumstances of the case, interest under section 234B is not leviable, being consequential in nature. The Appellant denies its liability to pay interest under section 234B. Even otherwise the interest computed is excessive. The Appellant submits that each of the above grounds/ sub-grounds are indep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the appeal is admitted for adjudication on merits. 6. During the course of hearing before us, the Authorized Representative (AR) for the assessee submitted that the CIT(A)-NFAC has not adjudicated upon any of the grounds of appeal and has merely dismissed the appeal without deciding the issues on merits. 7. The Departmental Representative (DR), on the other hand, fairly conceded that the appeal should have been heard by CIT(A)-TP, given that the primary issue involved is Transfer Pricing adjustments. The DR submitted that the matter may be restored to CIT(A)-TP for proper adjudication. 8. We have heard the rival submissions and perused the material available on record. It is evident that the CIT(A)-NFAC has dismissed the appeal witho ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
