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TMI Blog2016 (12) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... be rejected and why the CPM was correct as adopted by the Assessing Officer /TPO. These cases do not appear to be comparable for the reason discussed above. In view of above, CIT(A) was justified in deleting the addition made by TPO/Assessing Officer. This reasoned factual finding of CIT(A) needs no interference from our side. - Decided against revenue - ITA. No.3971/Ahd/2008 - - - Dated:- 26-7-2016 - SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER. For The Appellant :Shri Roop Chand, Addl. CIT For The Respondent : Shri Tushar Hemani ORDER PER SHAILENDRA KUMAR YADAV, J.M: This appeal has been filed by Revenue against the order of Commissioner of Income Tax (Appeals)-I, Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was carried before the First Appellate Authority, wherein various contentions made on behalf of assessee and having considered the same, CIT(A) deleted the addition in question. 2.2 Same has been opposed before us on behalf of Revenue inter alia submitting that CIT(A) erred in deleting the addition of ₹ 97,30,144/- made by Assessing Officer on account of upward adjustment in the international transactions related to sales. Accordingly, learned Departmental Representative requested to set aside the order of CIT(A) and that of Assessing Officer be restored. On the other hand, ld. Authorized Representative supported the order of CIT(A). 2.3 After going through rival submissions and material on record, we find that Assessee company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous approval of the Commissioner, refer the matter to the TPO. (c) On receipt of such a reference, the TPO has to issue a show-cause notice as prescribed under Section 92CA(3) asking for various details/documents. (d) The TPO shall thereafter determine the arms length price in accordance with Section 92C(3) i.e. the procedure mentioned in para-(a) above. For the purpose of computing this arms length price, the TPO has to follow the procedure and method mentioned in sub-section (1) and sub-section (2) of Section 92C read with Rule 10B 10C. (e) Rule 10B prescribes various methods and gives various conditions whereby the TPO/A.O. is required to adhere to for determining the most appropriate method. This rule gives various condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... associated enterprise is of ₹ 7.13 crores and purchases were of ₹ 63,121/- only. According to Assessing Officer, assessee's gross profit margin on cost was 7.4%. Assessee stated that in comparison to this the Directors' report of Deep Diamond India Ltd, for A.Y, 2003-04 reveals that the business of Deep Diamond India Ltd. comprised only of domestic operation whereas assessee company has 87% of the turnover as export sales. Further, the turnover of Deep Diamond India Ltd. was only ₹ 3.79 crores whereas assessee s turnover is ₹ 8.53 crores. 2.6 Regarding Moon Diamond Ltd., the stand of assessee has been that it is also not comparable because as per the notes on account of the annual accounts for F.Y. 2003-04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany was existed last 30 years, whereas assessee company has started operation in the current year only i.e. from January 2004 i.e. only for three months. During F.Y, 2003-O4 Sovereign Diamonds Ltd. raw material purchases have come down by 22.3%. Further, from the fact that the consumption of raw materials as percentage of sales has been showing consistently declined and has varied drastically from 92.6% (2002), 65.11% (2003), 57.59% (2004) and even subsequently 38.73% in 2005 which shows that possibly the company was going into job work income where the customers have supplied the raw materials like diamonds partly. In such a case materials were partly supplied by the clients and, therefore, the case is not comparable. 2.9 Further, as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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