9911796707
TMI Blog2012 (12) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer pricing adjustment of Rs. 2,68,77,839/- which has been agitated in the present appeal and the following grounds of appeal have been filed:- " The following grounds of appeal are mutually exclusive of and without prejudice to each another, until otherwise stated therein: 1. On the facts and in the circumstances of the case and in law, the Hon'ble Dispute Resolution Panel (DRP) erred in confirming order under section 92CA(3) the Income Tax Act, 1961 ("the Act") passed by the learned Transfer Pricing Officer ("TPO") and thereby confirming the draft order passed by learned Assessing Officer ("AO"); 2. On the facts and in the circumstances of the case and in law, the Hon'ble DRP/TPO erred in rejecting two comparable companies, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case and in law, the Hon'ble DRP/TPO erred in not directing TPO to allow upward variation of 5 percent in determining the arm's length price as amended proviso to section 92C of the Act is not applicable to A.Y. 2006H07. 9. On the facts and in the circumstances of the case and in law, the Learned TPO erred in violating the principles of natural justice by failing to not providing assessee opportunity to submit evidences to support the arm's length nature of international transaction. 10. On the facts and in the circumstances of the case and in law, the learned AO erred in not meeting the preconditions for making reference to the TPO under section 92 CA (1) of the Act and in not providing an opportuni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Industries 8.82 4. Century Laminates 7.98 5. Gadage Mahalaxmi 14.29 6. Handicrafts & Handloom (-) 0.09 7. Merino Panel 7.13 8. Pratik Panels 0.20 9. Southern Veneers (-) 38.10 Mean 3.02% 5. The TPO rejected the eight comparables with the following observations:- i) Gadage Mahalaxmi, the comparable mentioned at Sl.No.5 is excluded on the ground that this comparable derives only rental income. ii) Handicrafts & Handloom, mentioned at sl. No.6 is rejected on the ground that it deals primarily in silver and gold jewellery. iii) Greenply Industries, mentioned at sl. No.3 is rejected on the ground that it deals in plywood and particle board. iv) Southern Veneers, mentioned at sl. No.9 is rejected on the ground that it deals o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst this company which was selected by the assessee as a comparable. The company is dropped from the list of comparables. 5.7.4 Marino Panel: It has been pointed out that this company is engaged in the manufacturing of laminates for interior. The objections of the assessee have been examined and are found to be correct. The broader industry of the comparable company and the assessee company is different. I therefore accept the objections raised by the assessee against this company which was selected by the assessee as a comparable. The company is dropped from the list of comparables." 6. The Gratex Industries being the only remaining comparable has been selected as comparable whose OP/TC is 8.26% and after giving the credit to the margi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price of the assessee on the basis of comparables selected by the TPO in subsequent year where suitable comparables were found and applied. He has listed out those comparables which were selected by the TPO during the assessment years 2007-08 and 2008-09. The chart is reproduced below for the sake of convenience:- S.No. Name of the comparable Operating Margin on Operating Cost F.Y. 2005-06 Source Product Accepted by the TPO 1. Anisa Carpets Ltd. 1.49% Company wide financials Carpets and druggets A.Y. 2008-09 2. Banaras beads Ltd. 9.10% Segmental Financials Handicrafts and carpets A.Y. 2008-09 and A.Y. 2007-08 3. Destini India Ltd. 3.71% Company wide financials Handicrafts A.Y. 2008-09 and A.Y. 2007-08 4. E Hill & Co. Ltd. 4.15% Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to remitting the matter back, following the rule of consistency as described in the aforementioned decision of Pune Bench in the case of Brintons Carpets Asia P. Ltd. (supra), we restore the issue raised by the assessee in the present appeal to the file of Assessing Officer for redetermination of the arm's length price of the subject international transaction. It will also be relevant to reproduce the observations of Pune Bench relying upon which it is considered proper to restore the matter back to the file of Assessing Officer. "11. Regarding the 'rule of consistency' and the relevant decisions on the topic, we have examined the facts for the assessment years 2006-07 and 2007-08. So far as the external comparables, turn over details of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
