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TMI Blog2016 (11) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... P of the international transaction. It is hereby directed in the ultimate analysis that the fresh examination in the case of eventuality as discussed above, be confined only to the issues agitated before the ld. CIT(A), which were not dealt with by him. With these observations, we set aside the impugned order and remit the matter to the file of AO for doing the needful as indicated above, after allowing a reasonable opportunity of being heard to the assessee. - ITA No.2375/Del/2011 - - - Dated:- 28-9-2016 - SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER For The Assessee : Shri C.S. Agarwal, Sr. Advocate and Shri R.P. Mall, Advocate For The Department : Shri Neeraj Kumar, Sr. DR ORDER PER R.S. SYAL, AM: This appeal by the Revenue emanates from the order dated 25.2.2011 passed by the CIT(A) in relation to the assessment year 2005- 06. 2. The only issue raised by the Revenue through various grounds is against the deletion of transfer pricing addition of ₹ 1,14,27,114/- by directing to include M/s Datamatics Ltd. with calibrated OP/TC margin of 1.76% from the list of comparables. 3. Briefly stated, the facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncide with the financial year of the appellant. He found that the assessee had suitably adjusted financial results of Datamatics Limited by which the operating results for the financial year 2004-05 were determined for a period of 12 months. This was held to have been done so as to coincide with the financial year of Datamatics Ltd. with that of the appellant. He also noticed that the assessee computed OP/TC of 1.76% of this company, which was fair and reasonable and in harmony with the established norms and principles. He still further held that the contention of the TPO that the data of Datamatics Limited was not contemporaneous because of irregular annual pattern, was not correct. Contemporaneous data as referred to in rule 10D(4), in his opinion, did not necessarily mean data pertaining exactly to the same financial year and covering the same period as the international transaction under consideration. He held that `Contemporaneous simply meant relating to the same period of time and did not necessarily mean during the same tax year/month. The ld. DR, inter alia, raised objection to this finding returned by the ld. CIT(A) that the contemporaneous data can be a period of 12 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vacate the view point of the ld. CIT(A) on this score. 6. The ld. AR contended that though the year ending of Datamatics Ltd. is different, yet, the assessee collated its data for the financial year 1.4.2004 to 31.3.2005, giving OP/TC at 1.76% from their Annual accounts only, which was placed before the ld. CIT(A). It was claimed that this figure was determined by adopting the figures of quarterly data from the Annual reports of this company, which were adjusted for the financial year ending 31.3.2005. 7. We want to deal with the apprehension expressed by the ld. DR about the difficulty in working the relevant figures for the year ending 31st March, 2005 on the basis of data given by this company. At the cost of repetition, we reiterate that only when correct figures of an otherwise functionally comparable company are possible to deduce for the year ending matching with the assessee, without carrying out any adjustments to such accounts by any interpolation or extrapolation, that it would merit inclusion in the list of comparables. In the otherwise scenario, such a company would automatically go out of the reckoning. 8. There is no dispute that the calculation of OP/TC of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see should be made free to ask for the inclusion of new companies and also the exclusion of the existing companies. This was opposed by the ld. DR. 10. The ld. AR has invoked rule 27 of the ITAT Rules, 1963 for the argument that if Datamatics Ltd. is found by the TPO to be not includible in the list of comparables or if despite its inclusion, the average profit of all the comparables warrants the transfer pricing adjustment, then the entire exercise of benchmarking be done afresh. This rule with the caption `Respondent may support order on grounds decided against him provides that : ` The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him. When we consider the language of the rule, it becomes vivid that there is no warrant for the setting aside of the entire proceedings for doing a de novo determination. The language of the rule is unambiguous in providing that the respondent has the right to support the order on the grounds decided against him. No decision on an issue challenged before the CIT(A) also amounts to a decision against the appellant. It is but natural that if the CIT(A) deletes the add ..... X X X X Extracts X X X X X X X X Extracts X X X X
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