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TMI Blog2022 (12) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... tered into various international transactions with its Associated Enterprises [AEs] and also Specific Domestic Transactions with its subsidiary companies situated in India and therefore the Ld. AO referred the matter to the Ld. Transfer Pricing Officer [the TPO] for computing the Arm's Length Price [ALP]. The Ld. TPO considering the submissions made by the assessee's Representative, rejected the TP documentation maintained by the assessee and a TP adjustment of Rs. 1,08,98,025/- on the international transactions pertaining to interest on working capital and term loans of Rs. 61,64,747/- in respect of specified domestic transaction with 3F Oil Palm Agrotech Private Limited [3F Oil Palm] vide its order dated 31/10/2016 passed U/s. 92CA(3) of the Act. The assessee noticed certain mistakes apparent on record and filed a rectification petition U/s. 154 of the Act. The Ld. TPO rectified the mistakes vide order dated 18/11/2016 by revising the TP Adjustment of Rs. 14,05,566/- pertaining to interest on working capital and term loans of Rs. 62, 64,747/- in respect of specific domestic transactions. Considering the TPO's order, the Ld. AO completed the scrutiny proceedings and passed a draft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es as comparable to 3F Oil Palm. i. Vimal Foods Private Limited. ii. Amira Pure Foods Private Limited. iii. JMD Oil Mills Private Limited iv. Mauria Udyog Limited v. Kirti Dall Mills Limited vi. Poona Dal and Oil Industries Limited vii. Kirti Agrotech Limited Ground No.4: Rejecting of entrepreneurial companies: Notwithstanding an objective comparative analysis rejecting entrepreneurial companies engaged in palm tree plantation and production inter alia including: i. Godrej Agrovet Limited (Vegetable Oil Segment). ii. Ruchi Soya Industries Limited (Extractions segment) iii. Navabharat Agro Products Private Limited iv. Oil Palm India Limited Corporate Tax Matters Ground No.5: Disallowing Miscellaneous Expenditure incurred towards business of the appellant of Rs. 64,895/- Ground No.6: Initiating penalty proceedings U/s. 271(1)(c) of the Act." 4. The assessee raised in its grounds of appeal the rejection of CUP method and application of TNMM method and also objected to the selection of companies which comprises of the grounds No. 1 to 4. The assessee in Ground No.5 raised the issue of disallowance of miscellaneous expenditure amounting to Rs. 64,895/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in particular it is clearly noticeable that Clause (i) of section 92BA of the Act came to be omitted w.e.f. 01.04.2019 by Finance Act, 2014. As to whether omission would save the acts is an issue which is no more res intigra in the light of authoritative pronouncement of Hon'ble Apex Court in the matter of Kolhapur Canesugar Works Ltd. v. Union of India AIR 2000 SC 811 whereunder Apex Court has examined the effect of repeal of a statute visa- vis deletion/addition of a provision in an enactment and its effect thereof. The import of section 6 of General Clauses Act has also been examined and it came to be held: "37. The position is well known that at common law, the normal effect of repealing a statute or deleting a provision is to obliterate it from the statute-book as completely as if it had never been passed, and the statute must be considered as a law that never existed. To this rule, an exception is engrafted by the provisions of section 6(1). If a provision of a statute is unconditionally omitted without a saving clause in favour of pending proceedings, all actions must stop where the omission finds them, and if final relief has not been granted before the omission goe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the similar activities has an arithmetic mean of 15.75% as against the margin of 11.66%k of 3F Oil Palm. The Ld. AR therefore argued that hence these transactions should be considered at ALP and therefore, the assessee has procured Oil Palm from 3F Oil Palm Agrotech Pvt Ltd., at a price lesser than the other cultivators and manufacturers. The Ld. AR further pleaded that the Ld. TPO should be considering the right comparables and hence the matter may be remitted back to the Ld. TPO for consider the same and similar companies engaged in manufacture and production of Oil Palm. 10. With respect to disallowance of Rs. 64,875/- being the miscellaneous expenditure by the Ld. CIT(A), the Ld AR submitted that these expenses are incurred towards the business of the appellant and hence pleaded to be allowed. Per contra, the Ld. DR relied on the orders of the Ld. Revenue Authorities. The Ld. DR further submitted that the 3F Oil Palm is a tax exempt entity as they claimed exemption benefit U/s. 80IB of the Act and hence they charged over pricing of the Oil Palm supplied to the assessee company. The Ld. DR further submitted that the 3F Oil Palm has earned a margin of 11.66% against the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties ie., Non-Associated Enterprises is more than the price charged to the assessee by 3F Oil Palm. Further, from the financials submitted by the Ld. AR, we find that 3F Oil Palm has sold Rs. 7.68 Crs worth goods / services to the assessee as against the total sales of goods by 3F Oil Palm aggregating to Rs. 88.51 Crs. From the above, we find that the sales made by 3F Oil Palm to the assessee by less than 10% of the total sales of 3F Oil Palm. 14. In view of the above discussions, we are inclined to remit the matter back to the file of the Ld. TPO to verify the claim made by the assessee-company with respect to price chart to third parties vis-à-vis price supplied to the assessee. Similarly, the Ld. TPO may also verify the price charged by 3F Oil Palm to the assessee as against the notified rates by the Government of Andhra Pradesh vide its Government Orders on Monthly basis. We therefore, direct the Ld. TPO to compare the rates and decide the matter in accordance with law after affording a reasonable opportunity of being heard to the assessee. 15. With respect to Ground No.5 regarding disallowance of Miscellaneous Expenditure of Rs. 64,895/-, we could not accept the argum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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