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TMI Blog2019 (7) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... o the working of the assessee we are of the view that it is not a case of concealment of income or furnishing of the inaccurate particulars. Moreover the assessee has acted in good faith and with due diligence so no penalty is leviable in view of the law settling in case tiled as Pr. CIT-04 v. Gap International Sourcing India Pvt. Ltd. [ 2017 (8) TMI 1556 - DELHI HIGH COURT] , Pr. CIT-6 v. Mitsui Prime Advanced Composites India (P.) Ltd. [ 2017 (4) TMI 186 - DELHI HIGH COURT] . Taking into account of all the facts and circumstances, we are of the view that the finding of the CIT(A) is not justifiable and is not liable to be sustainable in the eyes of law, therefore, we set aside the finding of the- CIT(A) in question and delete the penalty - Decided in favour of assessee. - ITA No.3638/Mum/2015 - - - Dated:- 26-6-2019 - Shri Shamim Yaha, Accountant Member And Shri Amarjit Singh, Judicial Member For the Assessee : Shri S. Senthil Kumar For the Revenue : Shri Nitesh Joshi Kirti Talreja ORDER PER AMARJIT SINGH, JUDICIAL MEMBER The assessee has filed the present appeal against the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer; 5. Ground No.5 On the facts and circumstances of the case, the Ld. CIT(A) has erred in failing to appreciate that the Appellant had acted in good faith and exercised due diligence while conducting the transfer pricing study and determining the arm s length price of international transactions under section 92C of the Act and hence no penalty could be levied as provided in Explanation 7 to Section 271 (1)(c) of the Act. 6. Ground No.6 On the facts and circumstances of the case, the Ld. CIT(A) has erred in failing to appreciate that the determination of the arm s length price is a subjective exercise and not an exact science and hence, no penalty can be levied merely on acceptance/rejection of certain comparables, which would be a debatable issue; 7. Ground No.7 On the facts and circumstances of the case, the Ld. CIT(A) has erred in holding that Explanation 1 to section 271(1)(c) of the Act would apply since the Appellant had made a bogus claim as per its original return and failed to provided an explanation for its claim or substantiate is explanation or prove its claim as bona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies in which 4 companies i.e Apitco Ltd, Rites Ltd, Vapi Waste Effluent Mgmt Co. Ltd and WAPCOS Ltd (Seg) are the Government Companies which cannot be treated as good comparable and if the same may deleted then the margin would be 9.82% which is almost near to the margin assessed by the assessee . It is argued that Aptico Ltd is not a good comparable in view of the decision of the Hon'ble ITAT in case of Philip Morris Services India S.A. v. Deputy Director of Income-tax, circle 2(1), New Delhi (ITA No. 827/Del/2014) (Delhi-Trib.) dated 21 June, 2018, Nokia Siemens Networks (P.) Ltd. v. ACIT, Circle 13(1), New Delhi (ITA No. 332/Del/2013) (Delhi-Trib.) dated 1 October, 2018. Rites Ltd is also not a good comparable as held by the Mumbai Tribunal in case of ACIT, Range 10(3) v. Chemtex Global Engineers (P.) Ltd. (ITA No. 3590/Mum/2010) dated 12 June, 2013, Shel India Markets (P.) Ltd. v. ACIT, Large Taxpayer Unit, Mumbai (ITA No. 193/Mum/2013) dated 10 December 2014, Novartis Healthcare (P.) Ltd. v. Addl. CIT, Range 7(1), Mumbai (ITA No. 7643/ Mum/ 2012) dated 30 April, 2015. Vapi Waste Effluent Mgmt Co. Ltd is also not a good comparable in view of the decision of the No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name of the company OP/TC % (AY 2009-10) 3 Choksi Laboratories Ltd 22.77 % 4 ICRA management Consulting Services ltd -2.78 % 5 I D C (India) Ltd 9.99 % 6 Indus Technical Financial Consultants Ltd 7.95 % 7 Rites Ltd (Seg) 29.27 % 8 Technicom-Chemie (India) Ltd 2.51% 9 Vapi Waste Effluent Mgmt Co Ltd 26.89% 10 WAPCOS Ltd (Seg) 25.87% Arithmetic Mean 16.85% An ..... X X X X Extracts X X X X X X X X Extracts X X X X
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