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TMI Blog2019 (6) TMI 1577X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Joint Commissioner of Income Tax, Transfer Pricing-4(1), Mumbai (hereinafter referred to as the 'learned TPO') on the following grounds, each of which are without prejudice to one another: On the facts and in the circumstances of the case and in law, the learned AO/ learned TPO on fact and in law has: Addition on account of transfer pricing adjustments General 1. erred in making an adjustment of INR 33,66,72,501 to the total income of the Appellant under Section 92CA(3) of the Act on account of adjustment in the arm's length price of the international transaction of sale of raw materials and goods. 2. erred in determining the Assessee's total income at INR 52,02,32,300 as against the returned income of INR 18,35,59,790 disclosed in the revised return filed. Rejection of functional and economic analysis undertaken by Appellant 3. erred rejecting the functional and economic analysis undertaken by the Assessee in accordance with the provisions of the Act read with the Income-tax Rules, 1962 ('the rules') in respect of the impugned international transaction of sale of raw materials and goods. Inappropriate rejection of comparable companies ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 6,59,93,320, resulting in excess interest levy of Rs. 20,42,322. Excess levy of interest under section 234C of the Act 13. erred in levying interest under section 234C of the Act on the assessed income without appreciating that interest under section 234C is leviable on the returned income. The above grounds of appeal are independent and without prejudice to each other. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at the time of hearing of the appeal, so as to enable the Honorable Members to decide this appeal according to law. 3. Brief facts of the case are that assessee is engaged in the business of manufacturing shaving products that is razor and razorblades. The international transaction entered by the assessee with its associated enterprises were sale of packing material purchase of packing material sale of razorblades, sale of machinery etc which were intrinsically linked and were clubbed together for benchmarking analysis. The assessee has adopted TNMM as the most appropriate method for comparable analysis. The op/oc of the assessee was 10.39%. The assessee compared its operating m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nses are allocated on the basis of whatever basis the operating margin of the assessee for the export segment would compare favourably with the mean of the operating margin of the comparables as selected by the TPO. Hence he submitted that authorities below have totally erred in rejecting the assessee's submission on the ground that segmental account is not audited. 7. Per Contra learned departmental representative would not disputed the proposition that even if the common expenses are allocated on the basis of whatever allocation key chosen the operating margin of the export segment of the assessee would compare favourably with that of the comparables selected by the transfer pricing officer. However the learned departmental representative in this regard submitted that if this proposition is accepted the matter may be set aside to the transfer pricing officer who would then compare the profit margin of the export segment of the assessee to the profit margin of the comparable companies since only likes can be compared in transfer pricing proceedings. He submitted that it would not be proper to compare the profit margin of export segment of the assessee with the profit margin o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondition as tacking. Without examining the fulfillment or otherwise of the other two conditions, he rejects the claim, in that case if such first requirement is subsequently found to be fulfilled in the appellate proceedings, the Departmental Representative can very well point out to the tribunal that the other two conditions were a/so not fulfilled. By so contending the DR cannot be said to set up a new case, Rather it would amount to supporting the view point of the Assessing Officer on the question of deduction. But in no circumstance the Departmental Representative can be allowed to take a stand contrary to the one taken by the AO/TPO". Learned Counsel of the assessee submitted that this decision has been upheld by Hon'ble Jurisdictional High Court in ITA No. 692/2012. 9. Per Contra learned departmental representative submitted that the reliance by the learned counsel of the assessee for this decision was not appropriate in this regard he referred to the decision of honourable Delhi ITAT in the case of Summarised India private limited Swarovski (I) Pvt. Ltd. Vs. DCIT in ITA No. 3472/Del/2010. 10. In rejoinder learned counsel of the assessee in this regard submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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