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TMI Blog2019 (11) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the +/- 5% arm s length range. We further find that the TPO in the instant case has passed rectification order twice i.e., the first one on 19th August, 2014 and the second one on 12th March, 2015 and finally reduced the TP adjustment from 11,09,72,200/- to ₹ 4,10,82,956/-. We, therefore, find merit in the argument of the appeal filed by the Revenue should be dismissed being infructuous since the variation between the ALP so determined and the price at which the international transaction has actually been undertaken does not exceed 5%. The grounds raised by the Revenue are accordingly dismissed. - ITA No.6290/Del/2015, CO No.06/Del/2016 (ITA No.6290/Del/2015) - - - Dated:- 22-10-2019 - Shri R.K. Panda, Accountant Member And Ms Suchitra Kamble, Judicial Member For the Assessee : Ms Pallavi Dinodia Gupta, CA For the Revenue : Ms Nidhi Sharma, Sr. DR ORDER PER R.K. PANDA, AM: The appeal filed by the Revenue is directed against the order dated 20th August, 2015 of the CIT(A)-44, New Delhi, relating to assessment year 2010-11. The assessee also filed Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.96 Assessee ii. Clutch Auto Ltd. 9.59 Assessee iii. Exedy India Ltd. 3.45 Assessee iv. Hindustan Hardy Spicer Ltd -0.78 Assessee v. IAI Industries Ltd. -0.47 Assessee vi. K R Rubberite Ltd. 4.42 Assessee vii. Rasandik Engineering Ind.India Ltd 8.24 Assessee viii. Schrader Duncan Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xxiii. RSB Transmission (I) Ltd. 14.4 TPO xxiv. Suprajit Engg. Ltd. 18.37 TPO xxv. Setco Automotive Ltd. 12.79 TPO xxvi. BMW Industries Ltd. 8.66 TPO xxvii. Tata Auto Comp Systems Ltd. 7.38 TPO Average 7.05% 5. The TPO has only proposed adjustment in respect of aforementioned international transactions entered into with manufacturing segments. No adjustment has been proposed in respect of the trading segment or purchase of capital goods. The TPO, after excluding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Arm s Length PLI 7.05% Arm s Length Operating Cost 20,92,72,200 Arm s Length Cost 2,75,91,27,000 Operating Cost of 2,87,01,00,000 Difference between ALP Cost Operating Cost 11,09,72,200 Difference (in%)with the Arm s Length cost 10.44% Percentage of international transaction in manufacturing segment to total of internationals transactions (i.e ₹ 1062538120/₹ 1789939325*100) 59.36% Proportionate Difference for which adjustment is required to be made 6,58,73,098 7. However, the TPO/A.O. computed the TP adjustment by considering the proportion of international transactions in manufacturing segment to total international transactions which, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 11,09,72,200/-. The Ld. TPO had given the finding in para 11 of the order and the other international transaction are either relatable to trading segment or they are with respect to the purchase of capital goods and not affecting the operating reserve of the relevant segment. Therefore, the TPO has intended to made adjustment in manufacturing segment only. This decision of the TPO is further reinforced while passing the rectification order u/s 154 on 16.07.2014 and 12.03.2015 where adjustment in ALP has been made on pro-data basis in respect of manufacturing segment on the proportion of manufacturing cost of the total operating cost including trading segment which has been arrived at 59.36% in rectification order dated 16.07.2014 which has been finally computed to 37.02% in the rectification order dated 12.03.2015. By applying the proportionate difference required to be made the TPO is basically making adjustment on the operating cost relatable to the manufacturing segment. The total final adjustment in ALP relatable to manufacturing cost is ₹ 4,10,82,956 on the total operating cost to the manufacturing segment amounting to ₹ 106,25,38,120 ratio (₹ 4,10,82 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of raw material and the proportionate arm s length operating cost falls within the +/- 5% arm s length range. We further find that the TPO in the instant case has passed rectification order twice i.e., the first one on 19th August, 2014 and the second one on 12th March, 2015 and finally reduced the TP adjustment from 11,09,72,200/- to ₹ 4,10,82,956/-. We, therefore, find merit in the argument of the ld. counsel that the appeal filed by the Revenue should be dismissed being infructuous since the variation between the ALP so determined and the price at which the international transaction has actually been undertaken does not exceed 5%. The grounds raised by the Revenue are accordingly dismissed. CO No.06/Del/2016 12. We have heard the rival arguments made by both the sides. Since the appeal filed by the Revenue has been dismissed, therefore, the CO filed by the assessee becomes infructuous. Accordingly, the same is dismissed. 13. In the result, the appeal filed by the Revenue and the CO filed by the assessee are dismissed. The decision was pronounced in the open court on 22.10.2019. - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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