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TMI Blog2019 (12) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances on this issue are similar, we set-aside the impugned order and remit the matter to the file of AO/TPO for deciding it in conformity with the directions given by the Tribunal in its order for the preceding year as referred to in para 20 of its order. Transfer pricing addition should be restricted only to the value of international transactions and not all the transactions - Admission of additional ground - HELD THAT:- DRP directed the AO/TPO to restrict the transfer pricing adjustment only with reference to the international transaction but the TPO failed to give effect to the DRP s direction in proper perspective while calculating transfer pricing addition in the final assessment order. The Tribunal in its order for the assessment year 2009-10 has also examined this issue on page 23 para 23. Following the judgment of Hon'ble Bombay High Court in CIT vs. Thyssen Krupp Industries India Private Ltd. [2015 (12) TMI 1076 - BOMBAY HIGH COURT ] the Tribunal has directed that the transfer pricing addition should be restricted to the transactions with AEs and not the unrelated or non-AEs. Following the same view, we allow this additional ground of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same view, we direct the AO to examine this issue. In case, there is some difference in the rates of depreciation between the assessee and comparables, then necessary adjustment should be allowed on this count in the profit of comparables. Restricting the transfer pricing addition only to the international transactions and not the unrelated transactions or transactions with non-AEs - HELD THAT:- Following the consistent view taken herein in the immediately two preceding assessment years, we direct to restrict the amount of transfer pricing addition only in respect of transactions with AEs and not with non-AEs. - ITA No.571/PUN/2015, ITA No.541/PUN/2015, ITA No.976/PUN/2016 - - - Dated:- 6-12-2019 - Shri R.S. Syal, Vice President And Shri Partha Sarathi Chaudhury, Judicial Member For the Assessee : Shri Aliasger Rampurwala Shri Pratik Shah For the Revenue : Shri T. Vijaya Bhaskar Reddy ORDER PER R.S.SYAL, VP : This batch of three appeals involves two cross appeals for the assessment year 2010-11 and one appeal by the assessee for the assessment year 2011-12. Since s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and circumstances are similar. This issue is, therefore, decided against the assessee. 5. The second issue about the adjustment not exceeding the income earned by the Associated Enterprises from supply of raw materials was not pressed, which is dismissed as not pressed. 6. The third issue about the exclusion of comparables selected by the TPO was also not pressed, which is again dismissed as not pressed. 7. Another issue which survives for consideration is the challenge to the adjustment on account of depreciation towards difference in rates. The ld. AR submitted that similar issue also came up before the Tribunal in its order for the assessment year 2009-10. By inviting our attention towards page 23 para 20 of the order, the ld. AR submitted that the Tribunal has restored the matter to the file of AO/TPO for allowing adjustment to the operating margin of comparable companies if there is some difference in the rates of depreciation charged by the assessee vis- -vis the comparable companies. In view of the reason that the facts and circumstances on this issue are similar, we set-aside the impugned order and remit the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moto transfer pricing adjustment offered by the assessee at ₹ 38.00 lakh was ignored by the AO/TPO, who enhanced the income with the amount of transfer pricing addition computed without giving effect to such amount offered by the assessee. 14. The assessee itself suo moto offered transfer pricing addition of ₹ 38.00 lakh in this international transaction and offered the same in the computation of total income under point no.20.7. The claim of the assessee before the Tribunal is that the authorities have gone ahead with the transfer pricing addition as computed by them without giving effect to the amount of income voluntarily offered by the assessee. The AO/TPO is directed to verify the assessee s contention. In case the assessee offered the transfer pricing addition of ₹ 38.00 lakh which inadvertently went unnoticed, then relief to this extent should be allowed. Needless to say, the assessee shall be allowed a reasonable opportunity of hearing. 15. The issue of conducting selective fresh analysis while adopting certain additional quantitative/qualitative filters was not pressed by the ld. AR, which is hereby dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried on in India primarily relates to drafting/modeling of designs. Thereafter, the processing of the job is done. 20. The TPO proposed the inclusion of Coral Hub Ltd. (Vishal Information Technologies Ltd.) which was objected to by the assessee on the ground that it was functionally different with the different business model and different financial year. The TPO rejected the assessee s contention for its inclusion in the list of comparables, which was echoed by the DRP. 21. Having heard both the sides and perused the relevant material on record, it is found as a preliminary point that Coral Hub Ltd. was following June as the year ending as against the assessee following financial year, namely, year ending on 31st March. Thus, there is basic difference in the year ending periods of the assessee and the company. The Hon ble Bombay High Court in CIT Vs. PTC Software (2017) 395 ITR 176 (Bom.) has held that the companies with different financial year endings cannot be considered as comparable under Rule 10B(4). In addition, there are certain other functional differences also between the assessee and Coral Hub Ltd. Without delineatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion amount should be considered as a part of Operating Cost and that no adjustment can be granted on account of different amounts of depreciation in the hands of assessee and comparables. However, the Tribunal accepted the assessee s contention for granting adjustment in respect of different rates of depreciation between the assessee and comparables. Following the same view, we direct the AO to examine this issue. In case, there is some difference in the rates of depreciation between the assessee and comparables, then necessary adjustment should be allowed on this count in the profit of comparables. 29. The other issues regarding disregarding multiple year data and the AO failing to provide details of computation without giving effect to the directions of DRP were not pressed by the ld. AR. The same, therefore, dismissed as not pressed. 30. The only other issue which survives in the appeal is against restricting the transfer pricing addition only to the international transactions and not the unrelated transactions or transactions with non-AEs. Following the consistent view taken herein in the immediately two preceding assessment years, we direct to ..... 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