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TMI Blog2018 (3) TMI 1816X X X X Extracts X X X X X X X X Extracts X X X X ..... e working out the average profit margins of the comparables. DR submitted that the matter may be restored to the TPO for verification of the calculations furnished by the assessee for the working capital adjustment. Assessee did not object if the matter be restored to the TPO/AO for verification of the working capital adjustment and to allow the same as has been done by the TPO in subsequent assessment years. We, therefore, after considering the aforesaid submissions of both the parties, set aside this issue back to the file of the TPO/AO for verification of the calculations given by the assessee for the working capital adjustment and decide the issue for claim of the assessee on account of working capital adjustment on the same line as has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares 28,05,120 3 Export of finished goods 46,70,58,334 4 Import of finished goods Trading Segments TNMM 48,74,99,750 5 Interest on ECB Loan from Parent company. - CUP 2,13,31,147 6 Guarantee commission - CUP 3,75,000 7 Receipt for R&D Expenses Contract R & D At Cost/Transaction Value 6,97,50,774 8 Reimbursements paid for product development Cost reimbursement At Transaction Value 7,92,842 9 ECB Loan Received from parent company. Loan Transactions CUP 18,88,52,25,000 10 Advance received for capital grants Capital Grants -At Transaction Value 8,28,36,323 11 Reimbursement received Cost reimbursement -At Transaction Value 2,93,26,998 12 Reimbursement of miscellaneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nternational transactions entered into by the assessee. The AO, accordingly, made the addition of ₹ 79,67,93,400/-. 7. Being aggrieved the assessee carried the matter to the ld. CIT(A) who incorporated the assessee's submissions in paras 8 to 10.3 of the impugned order, for the cost of repetition, the same are not reproduced herein. The ld. CIT(A) rejected the claim of the assessee for separate benchmarking of the manufacturing and trading functions by following the order dated 08.10.2009 of his predecessor. However, on merit, the ld. CIT(A) held that after making the adjustment on account of utilization of the capacity, the operating margins of the assessee increased to 2.36% which was higher than that of the comparable companies. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er working capital adjustment was to be considered for benchmarking of the profit of the assessee. Accordingly, the aforesaid reasons, the ld. CIT(A) deleted the addition made by the AO. 9. Now the department is in appeal. During the course of hearing, the ld. Counsel for the assessee at the very outset stated that if only working capital adjustment is to be done then the average profit margins of the comparables vis-à-vis operating profit margins of the assessee would be in the range of ± 5% and no adjustment is required. It was also stated that in the subsequent years, the TPO had himself allowed the working capital adjustment while working out the average profit margins of the comparables. 10. In his rival submissions, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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