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2020 (3) TMI 1454 - AT - Income TaxTP Adjustment - assessee is seeking exclusion of four comparable i.e. M/s Metro Shoes Limited, M/s VF Brands India Private limited, M/s Tommy Hilfiger Arvind Fashion Limited and Sreeleathers Limited and seeking inclusion of two comparables i.e. M/s Dindayal Jalan Textiles Limited and M/s Colorplus Fashions Limited and there are some objections about margin computation and some adjustments such as Risk Adjustment and adjustment in respect of custom duty paid on import of raw materials etc - HELD THAT - The bench wanted to see the finding of DRP on these aspects and when the order of DRP was read, it was noticed that the order of DRP is cryptic and it is not a speaking and reasoned order. At this juncture, the bench made out this proposition that the matter has to go back to DRP for a fresh decision by way of a speaking and reasoned order. In reply, both sides agreed to this proposition but this was the common request of both sides that all aspect of the matter about T P adjustment should be left open for a fresh decision by DRP. We restore the entire TP Matter to DRP for a fresh decision by way of a speaking and reasoned order after providing adequate opportunity of being heard to both sides. In view of this decision, we make no comment on merit.
Issues:
1. Appeal against Assessment Order dated 23.10.2019 for Assessment Year 2015-16 under section 143(3) r.w.s. 144C of the Income Tax Act, 1961. 2. Grievance regarding Transfer Pricing (T P) Adjustment. 3. Exclusion of four comparables and inclusion of two comparables. 4. Objections about margin computation, Risk Adjustment, and custom duty on import of raw materials. 5. Order of Dispute Resolution Panel (DRP) being cryptic. 6. Decision to send the TP Matter back to DRP for a fresh decision. 7. Both sides agreeing to the proposition of sending the matter back to DRP. Analysis: The appeal was filed by the assessee against the Assessment Order dated 23.10.2019 for the Assessment Year 2015-16 under section 143(3) r.w.s. 144C of the Income Tax Act, 1961 as per the directions of the Dispute Resolution Panel (DRP). The assessee filed revised grounds dated 09.11.2019 with 13 grounds, and during the hearing, it was noted that Ground No. 1 and 2 were general, requiring no separate adjudication. The primary grievance of the assessee pertained to Transfer Pricing (T P) Adjustment, seeking the exclusion of four comparables and the inclusion of two comparables, along with objections regarding margin computation, Risk Adjustment, and custom duty on import of raw materials. The bench observed that the order of the DRP was cryptic and lacked a speaking and reasoned order. Consequently, the bench decided to send the entire Transfer Pricing (T P) Matter back to the DRP for a fresh decision through a speaking and reasoned order, ensuring both sides have adequate opportunity to present their case. Both parties agreed to this proposition, emphasizing that all aspects of the matter related to Transfer Pricing adjustment should be open for a fresh decision by the DRP. Therefore, the Tribunal restored the entire Transfer Pricing (T P) Matter to the DRP for a fresh decision, emphasizing the need for a speaking and reasoned order after providing a fair opportunity for both sides to be heard. The Tribunal refrained from commenting on the merit of the case due to this decision. As a result, the assessee's appeal was allowed for statistical purposes, with the decision pronounced in the open court on the specified date.
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