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TMI Blog2017 (12) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the Appellate Tribunal to the extent that the Transfer Pricing Officer (hereinafter referred to as TPO ) has been directed to include M/s.HMT Limited as a comparable and to re-work the comparable margin in determination of the arm's length price (hereinafter referred to as ALP ). 3. The respondent assessee Same Deutz Fahr India Private Limited is a part of the SAME Group of companies which had entered into joint venture agreements with M/s.Greaves Limited and set up two joint venture companies M/s.SAME Greaves Limited and M/s.SAME Greaves Tractors Limited. 4. In 2002, the SAME Group of companies acquired the stake of Greaves Ltd. in the two joint venture companies, after which the two Indian companies were renamed M/s.SAME India and M/s.SAME Deutz-Fahr India Private Limited. 5. To achieve operational and financial synergy and minimize operating costs, M/s.SAME Deutz-Fahr India Private Limited was amalgamated with SAME India with effect from 1st April, 2002. The amalgamation was approved by the Madras High Court in February, 2003 and in April, 2004 the amalgamated company (the respondent assessee) was renamed M/s.SAME Deutz Fahr India Private Limited. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the previous year in which the international transaction was entered into. Section 92C. Computation of arm's length price. (1) The arm's length price in relation to an international transaction shall be determined by any of the following methods, being the most appropriate method, having regard to the nature of transaction or class of transaction or class of associated persons or functions performed b y such persons or such other relevant factors as the Board may prescribe, namely.- (a) comparable uncontrolled price method; (b) resale price method (c) cost plus method; (d) profit split method; (e) transactional net margin method; (f) such other method as may be prescribed by the Board. (2) The most appropriate method referred to in sub-section (1) shall be applied, for determination of arm's length price, in the manner as may be prescribed. Section 92CA. Reference to Transfer Pricing Officer: (1) Where any person, being the assessee, has entered into an international transaction in any previous year, and the Assessing Officer considers it necessary or expedient so to do, he may, with the previous appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the respondent assessee appealed to the Income Tax Appellate Tribunal, 'D' Bench, Chennai. The appeal, being I.T.A.No.266/MDS/2016, has partly been allowed by the order dated 22.2.2017 under appeal. 13. The learned Tribunal observed that during the transfer pricing proceedings, the TPO had selected M/s.HMT Limited as one of the comparables on functional similarity, but while determining the ALP, he had not included M/s.HMT limited as a comparable. The learned Tribunal held: 7.3. We heard the rival submissions and perused the material placed on record. M/s.HMT Ltd., is in the segment of manufacturing of tractors and power tillers. The functionality of the M/s.HMT Ltd., and the assessee are more or less in similar. The Ld. AR of the assessee submitted that all the functions of M/s.HMT Ltd., and M/s.VST Tillers are one and the same. The TPO has rejected M/s.HMT Ltd., as comparable merely because of the turnover. The turnover of the M/s.HMT Ltd., for the AY 2005-06 was ₹ 248.00 Cr. as against the assessee's company turnover of ₹ 120.00 Cr. It is impossible to find out comparable with all similarities inclusive of turnover. Even M/s.VST Tiller sele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1961 provides as follows: Section 260A. Appeal to High Court. (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal before the date of establishment of the National Tax Tribunal, if the High Court is satisfied that the case involves a substantial question of law. (2) The Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner or an Assessee aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub-section shall be- (a) filed within one hundred and twenty days from the date on which the order appealed against is received by the Assessee or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. (b) [***]; (c) in the form of a memorandum of appeal precisely stating therein the substantial question of law involved. (2A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not defined in the Code. The word substantial, as qualifying question of law , means of having substance, essential, real, of sound worth, important or considerable. It is to be understood as something in contradistinction with technical, of no substance or consequence, or academic merely. However, it is clear that the legislature has chosen not to qualify the scope of substantial question of law by suffixing the words of general importance as has been done in many other provisions such as Section 109 of the Code or Article 133(1)(a) of the Constitution. The substantial question of law on which a second appeal shall be heard need not necessarily be a substantial question of law of general importance. In Guran Ditta v. Ram Ditta [(1927-28) 55 IA 235 : AIR 1928 PC 172] the phrase substantial question of law as it was employed in the last clause of the then existing Section 100 CPC (since omitted by the Amendment Act, 1973) came up for consideration and their Lordships held that it did not mean a substantial question of general importance but a substantial question of law which was involved in the case. In Sir Chunilal case [1962 Supp (3) SCR 549 : AIR 1962 SC 1314] the Constitution B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case there must be first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case. An entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter. It will, therefore, depend on the facts and circumstance of each case whether a question of law is a substantial one and involved in the case or not, the paramount overall consideration being the need for striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis. (See Santosh Hazari v. Purushottam Tiwari [(2001) 3 SCC 179] .) 24.The principles relating to Section 100 CPC relevant for this case may be summarised thus : (i) An inference of fact from the recitals or contents of a document is a question of fact. But the legal effect of the terms of a document is a question of law. Construction of a document involving the application of any principle of law, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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