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TMI Blog2017 (12) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... /Del/2014 - - - Dated:- 12-12-2017 - SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER For The ASSESSEE : Shri Ashwani Taneja, Advocate For The REVENUE : Shri Sanjay I. Baru, CIT DR ORDER PER BENCH : Since common questions of facts and law have been raised in both the aforesaid appeals and cross objection, the same are being disposed off by way of consolidated order to avoid repetition of discussion. 2. The Appellant, M/s. JCB India Ltd. (formerly known as M/s. JCB Manufacturing Pvt. Ltd.) (hereinafter referred to as the taxpayer ) by filing the present appeal being ITA No.6359/Del/2012 sought to set aside the impugned order dated 25.10.2012, passed by the AO in consonance with the orders passed by the ld. DRP/TPO under section 143 (3) read with section 144C of the Income-tax Act, 1961 (for short the Act ) qua the assessment year 2008-09 on the grounds inter alia that :- TRANSFER PRICING MATTERS Ground 1: Erroneous rejection of the transfer pricing analysis On the facts and in the circumstances of the case and in law, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining to provision of design engineering services to its Associated Enterprises. Ground 5: Erroneous computation of adjustment on the entire service income of Design Engineering Services Segment On the facts and in the circumstances of the case and in law, the Ld. DRP/AO/TPO has erred in computing the adjustment on the entire service income of the Design Engineering Services Segment (Plant III) of the Appellant amounting to ₹ 67,388,310, whereas the international transaction pertaining to this segment amounts only to ₹ 52,611,526. Thus, the Ld. DRP/AO/TPO have erred by not computing the adjustment on a proportionate basis. Ground 6: Erroneous selection I rejection of comparables for international transaction of provision of engineering design services On the facts and in the circumstances of the case and in law, the Ld. DRP/AO/TPO has erred in: a) Rejecting Onward Technologies Limited as functionally not comparable company; despite the fact that relevant CUP data for services procured by the Associated Enterprises from Onward Technologies was submitted by the appellant; b) Considering Rolta India Limited as comparable comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the assessee is working as license manufacturing or contract manufacture 3. That the order of the DRP is erroneous and is not tenable on facts and in law. 4. The Objector, M/s. JCB Manufacturing Pvt. Ltd., by filing the present cross objections challenged the assessment order dated 29.01.2014 passed by the Assessing Officer qua the assessment year 2009-10 on the grounds inter alia that :- 1. Under the facts and circumstances of the case and in law, the Ld AO has erred in confirming the Ld. TPO's judgment regarding rejection of transfer pricing approach undertaken by the appellant. In particular, the AO /TPO has erred in: Grounds pertaining to international transaction of export of components from Plant I 1.1 Rejection of economic adjustment conducted by the respondent on account of unabsorbed overheads due to underutilisation of capacity to compute the operating profit from the international transaction of export of components; 1.2 Rejection of accounting adjustment conducted by the respondent (to account for differences in rates of depreciation adopted by the respondent vis-a-vis comparables) for computation of operatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Import of raw materials 2,03,11,666 TNMM 2. Export of finished components 1,47,13,85,613 TNMM 3. Export of finished goods 88,09,17,903 TNMM 4. Import of kits 39,72,80,839 CUP 5. Export of raw material / parts (components) 35,02,75,661 TNMM 6. Export of raw material 1,43,87,723 TNMM 7. Purchases of capital assets 25,68,296 CUP 8. Design Engineering Services 5,26,11,526 TNMM 9. Write back of provision for rectification rework charges 1,52,34,244 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PLI of taxpayer at (-) 5.86% and proceeded to propose the arm s length as under:- Operating Cost of EDC Rs.7,15,86,142 Mean of the OPTC of the comparables 29.93% Arm s Length price of the international transaction (7,15,86,142 X 129.93/100 = ₹ 9,30,11,874 Adjustment over operating income Rs.9,30,11,874 ₹ 6,73,88,310 = ₹ 2,56,23,564 27. In view of the facts of the case, submissions of assessee and economic analysis carried out by it, the Arm s Length Price of transactions as reported by the assessee are being disturbed for the Plant I for ₹ 9,82,34,197 and for the Engineering Design Services for ₹ 2,56,23,564. 9. The taxpayer carried the matter by way of raising objections before the ld. DRP, which have been disposed off. Feeling aggrieved, the taxpayer has come up before the Tribunal by way of filing the present appeals. ITA NO.618/DEL/2014 (AY 2009-10) REVENUE S APPEAL CO No.284/Del/2014 (AY 2009-10) ASSESSEE S CROSS OBJECTION 10. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication for admission of additional grounds in ITA No.6359/Del/2012 for AY 2008-09 and in Cross Objection No.284/Del/2014 for Assessment Year 2009- 10 for the reason that the aforesaid grounds are legal and can be adjudicated on the basis of material already available on record. The additional grounds raised by the assessee in both the AYs 2008-09 and 2009-10 are as under :- ITA NO.6359/DEL/2012 (AY 2008-09) 1. That the Draft Assessment order dated 21.12.2011 and Final Assessment order dated 25.10.2012, both passed by the learned Assessing Officer are illegal and void-ab-initio, since these have been passed upon an entity which did not exist on the date of passing of these orders. 2. That in any case and in any view of the matter, impugned orders were passed by the lower authorities without assuming jurisdiction as per the law and thus impugned orders passed by the lower authorities including the order by the Hon'ble DRP are nullity in the eyes of law and deserve to be quashed. 3. That in any case and in any view of the matter, the impugned assessment orders have been passed in violation of provisions of Section 170(2) of the Income Tax Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case JCBMPL merged with JCBIL w.e.f. 01.04.2009, it was not in existence and was a non-entity. So, we are of the considered view that assessment order itself is a nullity and is not sustainable in the eyes of law. 17. Similarly, in case of JCBMPL for AY 2009-10 qua the appeal filed by the Revenue as well as cross objection filed by the taxpayer, assessment order was passed on 29.01.2014 whereas JCBMPL ceases to be in existence w.e.f. 01.04.2009 as per order passed by Hon ble High Court of Bombay dated05.02.2010 and order passed by Hon ble Delhi High Court dated 05.02.2010, 26.02.2010 and 26.02.2010. This fact has been highlighted by the ld. DRP in its order dated 21.09.2012 passed in JCBIL for AY 2008-09. 18. In view of what has been discussed above, without entering into the merits of the grounds of appeal raised by the taxpayer as well as the Revenue, additional grounds raised by the taxpayer in its appeals for AY 2008-09 and cross objection for AY 2009-10 are allowed and the assessment order dated 25.10.2012 for AY 2008- 09 and assessment order dated 29.01.2014 for AY 2009-10 are held to be nullity. Consequently, ITA No.6359/Del/2012 for AY 2008- 09 filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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