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TMI Blog2011 (1) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the Ld Assessing Officer pursuant to the directions of the Ld DRP is bad in law and void ab initio. 2. The reference made by the Ld Assessing Officer suffers from jurisdictional error as the ld Assessing Officer has not recorded any reasons based on which he reached the conclusion that it was necessary or expedient to refer the matter to the Additional CIT, Transfer Pricing (TP) for computation of the arm's length price as is required u/s 92CA(1) of the Act. 3. The Ld DRP and the Ld Assessing Officer erred both on facts and in law in confirming the addition of ₹ 3,71,89,793/- to the income of the appellant proposed by the Ld TPO by holding that its international transactions do not satisfy the arm's length principle envisaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing judicial pronouncements on the issue), thus demonstrating an intention to arrive at a pre-formulated opinion without complete and adequate application of mind with the single minded intention of making an addition to the returned income of the appellant. 3.6. including in the final set of comparable certain companies that are not comparable to the appellant in terms of functions performed, assets employed and the risks assumed. 3.7. not including in the first set of comparable certain companies which are comparable to the appellant in terms of functions performed assets employed and the risk assumed. 3.8. violating the principles of natural justice by not including in the final set of comparable, additional companies identified by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 92C(2) of the Act available to the appellant. 3.14. disregarding judicial pronouncements in India in undertaking the TP adjustment; and 4. the Ld Assessing Officer has grossly erred in initiating penalty u/s 271(1)( c) of the Act mechanically and without recording any satisfaction for its initiation. The above grounds are without prejudice to each other. 3. Brief facts of the case are that the draft assessment order was passed by the Assessing Officer u/s 144C/143(3) of the Income Tax Act, 1961. Therefore, the assessee filed objections between DRP has passed directions u/s 144C on 30.8.2010 against which the assessee is in appeal before us. Various factual and legal arguments were raised by the assessee before DRP as per Annexure-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5. As against this, Ld DR of the revenue supported the impugned order of DRP. 6. We have heard the rival submissions and have gone through the order of Assessing Officer as well as the order of DRP. Before examining the facts of the present case, we examine the Tribunal decision rendered in the case of Gap International Sourcing India Pvt. Ltd. (supra). In that case, the draft order of the Assessing Officer was dated 24.9.2009 and DRP passed directions u/s 144C on 30.8.2010. In that case, the Tribunal has reproduced the provisions of sub sections 5 to 13 of section 144C and thereafter, it has been observed by the Tribunal in that case that the directions of the DRP are too laconic to be left un-commented. The Tribunal has considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is justified for selecting the comparable, in this issue, the TPO has dealt in detail with the objections of the assessee in the body of the Transfer Pricing order itself. In the matter of working capital adjustment/risk adjustment the issues pointed out by the TPO are correct and there is no substantial force in the argument of the assessee to interfere with the findings of the TPO. In the matter of rejecting the comparables, as taken by the assessee, and selecting the new comparables, only after discussing in detail, the TPO arrived at the conclusion of rejecting/selecting the new comparables. The reasonings given by the TPO are scientific hence the objections raised by the assessee are not tenable. Thus, we find no compelling reasons to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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