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TMI Blog2018 (6) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... ns NV, Belgium and is in the business of hiring and leasing heavy cranes. Sarens group is stated to be one of the global leaders in transport and handling of heavy equipments. Apart from transport and handling, Sarens group is also engaged in retail and the operation of cranes and the problem solving linked with the crane work, rendering services with heavy cranes and equipments for erection jobs in big industrial and the civil projects in the field of petrochemicals, steel plants and major civil works. 3. The assessee filed their return of income on 15/10/2010 declaring an income of Rs. 2,67,60,419/-. During the scrutiny, Ld. AO found that in the relevant previous year, the assessee purchased nine used cranes from its AEs for Rs. 34,32,73 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee that the TPO has erred in computing arm's-length price as written down value of cranes in the books of AE without comparing the purchase price of cranes with fair market value which can be measured by capitalizing the rent earned from third parties in respect of such cranes in the absence of identical international transactions. It was further argued that ld. TPO has erred in rejecting the valuation report of independent valuer in respect of cranes purchased from AE without pointing out any defect in such report. 6. Assessee further pointed out that instead of taking the difference between the arm's-length price and the purchase price of cranes, TPO erred in making the adjustment, being the difference between the arm's-lengt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the assessee justified the price paid by way of a certificate which can be considered as external CUP and since the TPO/DRP did not rely on any other certificate and in the absence of any contrary information, price paid by assessee, which was less than the value mentioned in the certificate can be accepted as such. 10. Having considered all these aspects ld. DRP directed the TPO to accept the valuation report of the assessee company and to delete the edition made on account of the ALP of cranes. Consequently DRP also directed the deletion of the adjustment on account of payment of interest amount also. Hence, the revenue is in this appeal before us challenging such deletions. At the same time, assessee also preferred a Cross Obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering this aspect and by proceeding with an exemption that CUP always requires the comparison of transactions between unrelated parties. He submits that consequently the addition made by the ld. AO has to be sustained. 14. Per contra, it is the argument of the ld. Authorised Representative that the written down value of cranes in the books of the associated enterprise of the assessee cannot be considered as ALP as it is not derived from the transaction between enterprises other than associated enterprises. Basing on the decisions reported in CIT v. Ajax Products Limited [1965] 55 ITR 741 (Supreme Court), DCIT, Circle 3(1), New Delhi v. C-Dot Alcatel-Lucent Research Centre (P.) Ltd, 66 taxmann.com 281 ( Delhi-Trib.) [2016], Social Media Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erminability of the Fair Market Value of the Cranes by using Discounted Cash Flow Method, by placing reliance on reliance on the decisions in Visteon Asia Holdings Inc. v. DCIT, International Taxation-II (1), Chennai 73 taxmann.com 33 (Chennai-Trib), VIHI, LLC v. Additional Director of Income Tax, International Taxation, Chennai 42 taxmann.com 304 (Chennai-Trib), Ascendas (India) (P. )Ltd. v. Dy. CIT [2013] 33 taxmann.com 295 (Chennai - Trib.) and Tally Solutions (P.) Ltd. v. Dy. CIT [2011] 48 SOT 110/14 taxmann.com 19 (Bang.)he submitted that Present Value by DCF method of 9 cranes is Rs. 43,92,65,295.78 while invoice value of such cranes as per invoice value is Rs. 34,32,73,475. DCF method is scientific method to calculate the value of cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther ld. DRP observed that it is nobody's case that an old asset cannot be sold at a price exceeding net book value. Having considered the decisions relied upon by the assessee in support of their contention that either the valuation done by the chartered engineer, or the value accepted by the custom authorities, or the value derived by DCF method could be considered for a determination of the ALP. Ld. DRP considered the details furnished by the assessee as per these 3 valuations namely, as valued by the chartered engineer, are as valued by the customs authorities, or as valued by following the DCF method and having done all this exercise DRP reach the conclusion that the method adopted by the Assessing Officer is not an acceptable one. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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