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TMI Blog2020 (1) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... file of Assessing Officer. The Assessing Officer is directed to go through the same and decide as per law. Transfer Pricing adjustment of Singapore AE - HELD THAT:- As regards the Transfer Pricing adjustment, ld CIT(A) has noted that assessee s explanation appears to be acceptable and hence the assessing officer is directed to delete the above addition as the AR has established that the said Nomanbhoy Sons Pte Ltd (Singapore) is not an associated enterprise. In this regard we note that ld CIT(A) has not given a categorical finding. He has used the expression that it appears to him that assessee submissions are correct. In our considered opinion such vague orders are not sustainable. There should have been a categorical finding to be sustainable in law. In our considered opinion, this issue also needs to be remitted to the file of Assessing Officer. The Assessing Officer is directed to consider the issue afresh in light of the submissions and explanations given before the learned CIT (A). Transfer Pricing adjustment - CIT(A) has referred to the assessee submissions and has directed the Assessing Officer to verify and allow - HELD THAT:- We fail to understand as to how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case and in Law, the Id. CIT(A) erred in deleting the addition of ₹ 2,12,24,848/- by citing that the party i.e., Nomanbhoy Sons Pte Ltd, Singapore, treated as an Associated Enterprise of assessee by A.O. is not an Associated Enterprise of assessee as per information in Form 3CEB without calling for Remand Report from the A.O. before deciding the issue in favour of the assessee? iv. Whether, on the facts and circumstances of the case and in law, whilst it is true that it is the obligation of the AO to conduct proper scrutiny of the material, given the fact that the AO did not examine whether the conditions specified in clause (h) of Section 92A(2) of the Income-tax Act, 1961 are fulfilled so as to make i.e. Nomanbhoy Sons Pte Ltd, Singapore an Associated Enterprise (AE) of the assessee, the obligation to conduct proper inquiry of facts would shift to Ld.CIT(A) in view of the Hon'ble Delhi High Court decision in the case of C/T Vs Jansampark. Advertising am Marketing (P) Ltd (ITA No. 525/2014) which was not discharged the Ld.CIT(A)? v. Whether, on the facts and circumstances of the case and in law, the Id. CIT(A) erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Premier Marine Barge hire 2,800,000 28.03.20J I Machado Sons Agency charges 72,798 28.03.2011 Machado Sons Charges 618,770 25.03.2011 Laxmikant Parab Mineral Traders Transport Handling Charges 1,221,619 26.03.2011 Counto Metals Renting and using Jetty plots 7,818,360 12,531,547 'Note 2 . The Return of Income for the current fiscal year is being revised to claim the above expenses which relate to the year under consideration. No deduction has been claimed for the above expenses in the Return of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .he noted that the assessee has not filed any report or information in compliance to the provisions of said chapter X. He noted that since, the assessee has not filed information and documents which would enable the transfer pricing officer to determine and confirm the arm s-length price, he computed, the arm s-length price as under:- It is felt that a markup of 20% on trading activity should be reasonable and should represent Arms Length price. Consequently, 20% mark up on the expenses, as detailed below, incurred by the assessee has been considered to arrive at the Arms Length price. Nature of Expenses Amount (Rs.) Purchases 93,660,724 Custom duty 24,853,400 Shipment insurance 54,885 Clearing and forwarding charge 303,312 Loading port charges 2,204,379 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngth price of sale / export transaction (as per para-5 above) Add: Addition on account of inappropriate percentage of mark up on income from Sale/Export (as per para-6 above) 1,25,31,547 683,205 21,224,848 2,737,951 37,677,502 Gross Total Income 37,677,502 Less Deduction under Chapter. VIA - Total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emarks 31.03.2011 Premier Marine Barge hire 28,00,000 Bill (Page 27 of compilation) ₹ 56,243/- TDS challan Page 28 of compilation) 28.03.2011 Machado Sons Agency charges 72,798 Bill (Page 29 of compilation) ₹ 1.456/- TDS challan Page 32 of compilation) 28.03.2011 Machado Sons Charges 6,18,770 Bills (Page 306531 of compilation) ₹ 12,133/- TDS challan Page 32 of compilation) 25.03.2011 Laxmikant Parab Mineral Traders Transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nderstand which subsection of 92A(2) the Assessing Officer wanted to apply. I have further perused the following: a) Transfer Pricing certificate in Form 3CEB. b) Transactions with related parties disclosed in Schedule 8 in the Notes to Accounts. c) The statement of the appellant that the said alleged Associated Enterprises, Nomanbhoy Sons Pte. Ltd. is a completely unrelated party. d) In details of export sales submitted vide letter dated 21st October 2013 where there was a specific Section whether the party is a related party, the appellant clearly answered 'NO'. The only issue involved in this ground of appeal is M/s. Nomanbhoy Sons Pte. Ltd. (Singapore) treated by the Assessing Officer as an Associated Enterprise of the appellant company whereas the AR of the appellant argues that as per Form 3CEB, it is not mentioned as Associated Enterprise. Accordingly he has filed a copy of Form 3CEB wherein at page 3 of Form 3CEB the appellant company has mentioned Abdoolally Ebrahim Co.(HK) Ltd. Abdoolally House, 1st floor, 20, Stanley Street, Central, Hongkong as its Associated Ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some persons in the Accounts Department were required to continue in order to wind down the business. Although no services were rendered to the Associated Enterprise from January to March 2011, since the appellant was filing a revised Return of Income, by way of abundant caution, it made a Transfer Pricing adjustment in the revised Return of Income of ₹ 30,06,152/- computed as under: Export Segment Back office segment Expenses as per audited accounts for the year 54,15,049 1,09,37,528 Add: Expenses for Jan - March allocated to Back Office segment (27,47,097) 27,47,097 Adjusted expenses 26,67,952 1,36,84,625 Add: Markup 10% - 13,68,463 Total Amount chargeable 26,67,952 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng such doubtful observation. In this view of the matter there is certainly violation of 46 A and the finding of learned CIT (A) is also not categorical. Accordingly, in our considered opinion the submissions and documents on the basis of which learned CIT (A) has granted relief need to be remitted to the file of Assessing Officer. The Assessing Officer is directed to go through the same and decide as per law. Transfer Pricing adjustment of Singapore AE 22. As regards the Transfer Pricing adjustment, ld CIT(A) has noted that assessee s explanation appears to be acceptable and hence the assessing officer is directed to delete the above addition as the AR has established that the said Nomanbhoy Sons Pte Ltd (Singapore) is not an associated enterprise. In this regard we note that ld CIT(A) has not given a categorical finding. He has used the expression that it appears to him that assessee submissions are correct. In our considered opinion such vague orders are not sustainable. There should have been a categorical finding to be sustainable in law. In our considered opinion, this issue also needs to be remitted to the file of Assessing Officer. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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