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TMI Blog2011 (7) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to the TPO to deal with the assessee's objections and for passing a speaking order. determination of Arm Length Price (ALP) by Transfer Pricing Officer (TPO) - - IT APPEAL NO. 1433 (BANG.) OF 2010 - - - Dated:- 29-7-2011 - SMT. P. MADHAVI DEVI, A. MOHAN ALANKAMONY, JJ. K.R. Pradeep for the Appellant. Etwa Munda for the Respondent. ORDER Smt. P. Madhavi Devi, Judicial Member. This is an appeal filed by the assessee. The relevant assessment year is 2006-07. The appeal is directed against the order of the Income-tax Department at Bangalore dated 24-9-2010. The appeal arises out of the assessment completed under section 143(3) read with section 144C(13) of the Income-tax Act, 1961. 2. Though the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's appeal was allowed. The assessee has filed copy of the said orders before us and the same are taken on record. The learned DR, however placed reliance upon the orders of the authorities below and submitted that allocation of expenses between the eligible and non-eligible units is not correctly made by the Assessing Officer and that the assessing authority has rightly reallocated the same. 5. Having heard both the parties and having considered the rival contentions, we find that the nature of expenses being trading expenses is not in dispute but the issue is only of its allocation between the EHTP - 1 and EHTP - 2 units. This reallocation of expenses is under challenge from assessments years 1997-98 onwards and the Tribunal by its o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 10A of the Income-tax Act. In this connection, it would be worthwhile to reproduce the observations of the learned CIT(A) made while discussing the computation under sections 80HHC and 80HHE of the Income-tax Act in his appellate order for the assessment year 1997-98. "However, I would mention that the assessee has shown a tendency to claim undue deduction under sections 80HHC and 80HHE as discussed in his order and it is quite possible in the circumstances that effort has been made to increase the exempted income. It is hoped that the Assessing Officer examining the case of the assessee would ask for proper details and evidence and examine whether the assessee has transferred expenditure in respect of exempted activities to non-em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove issue are allowed. 7. The other grounds relates to transfer pricing adjustment made by determining the ALP. 8. The brief facts of the case are that the assessee is engaged in manufacturing of medical equipments and also development of software for these medical equipments. The assessee had transactions with its associated enterprises for importing certain medical equipments. The ALP with regard to these transactions was to be determined and the Assessing Officer had referred the matter to the TPO under section 92CA of the Income-tax Act for the said purpose. The TPO had adopted the company M/s AMD (Advanced Micro Devices Ltd.) as one of the comparables. The assessee had raised various objections to the adoption of this company or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase before us, the TPO has failed to consider the assessee's objections and deal with them judiciously. The DRP also, in our opinion, has dealt with the issue summarily without considering assessee's objections at all. The assessee has approached DRP only against the order of the TPO and it is the duty of the DRP to consider the assessee's objections to the TPO orders in judicious way. By summarily accepting the order of the TPO, the DRP has failed to perform the duty entrusted to it. However, since the TPO has not dealt with the objections raised by the assessee against the comparables selected by the TPO, we deem it fit and proper to remit the issue to the file of the assessing authority for taking necessary action of making a reference t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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