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TMI Blog2020 (11) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... ablish categorically based on cogent materials/evidences of how it should not be considered as operating for the purposes of computing margin of licensed manufacturing segment. Assessee is therefore directed to file all relevant documents/evidences/information necessary to establish its claim in respect of aggregation/segregation of the costs alleged in the order passed by Ld. CIT(A)/Ld. TPO. Assessee is also directed to file its response to various comparables proposed by Ld. TPO. Ld. TPO shall then pass a detailed order considering all the material evidences placed by assessee and compute the margin in accordance with law. Remand the issue to Ld. AO/TPO for de novo assessment as per Transfer Pricing provisions in accordance with law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with: Particulars Licensed Services Total Sales 650511930 45135334 695647264 Cost 1,113939169 18677323 1132616492 OP 463427239) 26458011 (436969228) OP / OC - 41.60% 142% OP / Sales (-) 71.24% 4. Ld. A.R. further submitted that assessee had provided segmental fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of licensed manufacturing segment in which assessee incurred huge loss of ₹ 46,34,27,239/-. The Ld. AR submitted that, show cause notice was consequentially issued to assessee to justify the claim of adjustments made under the licensed manufacturing segment being exchange fluctuation, bank charges, interest charges, management fee. Ld. AR also submitted that, Ld. TPO proposed such comparables that either did not have segmental details or were not functionally similar with assessee. 6. Ld. TPO thus aggregated exchange fluctuation, bank charges, management fees with the manufacturing segment and computed proposed adjustment being shortfall at ₹ 12,12,26,284/-. 7. Ld. AO while passing draft assessment order further disallowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to incur expenses by way of import of raw materials and components like interlocking system, Microlock II, AFTCS etc., in which majority of the expenses were with 3rd parties. 11. He also submitted that various documents that has been placed before this Tribunal by way of additional evidence under Rule 29 for admission, could not be filed before the authorities below due to circumstances beyond control. He submitted that these documents establish the losses incurred by assessee, was mainly due to delay in completion of the projects are not attributable to transaction entered with AE. 12. Ld. AR further submitted that during the Transfer Pricing assessment proceedings, Ld. TPO did not demonstrate the basis on which the comparables wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturing segment. 18. We note that in the show cause notice issued to assessee, reproduced in the order passed by Ld. TPO under section 92CA, Ld. TPO failed to follow the due process of law in respect of proposing comparables for computing the ALP of international transaction in manufacturing segment. Ld. TPO is therefore, directed to issue show cause notice with proposed comparables in accordance with law. 19. Also, in respect of bank charges, interest charges, management fees assessee should establish categorically based on cogent materials/evidences of how it should not be considered as operating for the purposes of computing margin of licensed manufacturing segment. 20. Assessee is therefore directed to file all relevant documen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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