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TMI Blog2019 (1) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as allowed for statistical purposes. - I.T.A. No. 494/HYD/2015 - - - Dated:- 15-1-2019 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER For The Assessee : Shri Abhiroop Bhargav, AR For The Revenue : Shri C. Srinivas Reddy, DR ORDER PER Smt. P. MADHAVI DEVI, J.M. : This is an appeal by the assessee for the AY. 2010-11 against the assessment order u/s. 143(3) r.w.s. 92CA(4) r.w.s. 144C(13) of the Income Tax Act [Act], dated 27-02-2015. Assessee has raised the following revised grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Ld. Transfer Pricing Officer (Ld. TPO), while giving effect to the directions of the Ld. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout prejudice to the ground no. 5, on the facts and in the circumstances of the case and in law, the Ld. TPO erred in applying an incorrect profit level indicator ('PU') of Operating profit/Operating cost ('OP/OC') while benchmarking the purchase transactions. 7. Without prejudice to the ground no. 5, on the facts and in the circumstances of the case and in law, the Ld. TPO erred in applying the same set of comparable companies for the purpose of benchmarking the international transactions of purchase of tools and accessories and purchase and sale of compressors as used for benchmarking the international transaction of sale of AK Kits and Components . 2. Brief facts of the case are that assesseecompany, deriving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the comparables selected by the assessee, which are both into manufacturing as well as sale of components. Observing that various shortcomings are there in the comparables selected by the assessee, he rejected the said comparables and proposed 8 (eight) companies as comparables, whose average margin was 26.56%. Assessee submitted its objections to the comparables selected by the TPO. However, TPO rejected the assessee s objections and adopted 17 (seventeen) companies as comparables, the Arithmetic Mean of the PLI [OP/OC] of the comparables being 21.88%. Thus, he proposed an adjustment of ₹ 5,80,01,717/-. Accordingly, draft assessment order was proposed by the Assessing Officer, against which assessee preferred its objections to the Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel submitted that even though the assessee is involved in two different activities of manufacture and sale, the TPO has taken the same set of comparables for both the transactions and has arrived at the adjustment, which is not correct. 4. We have gone through the orders of the lower authorities. We find that the assessee is into manufacture of compressors and also sale of compressors and both the activities are different and therefore, they require different set of comparables. Therefore, we deem it fit and proper to remit the issue to the file of AO/TPO for fresh analysis and fresh determination of ALP in accordance with law. Assessee shall be allowed to raise any contentions on account of comparables and also the method to be ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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