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TMI Blog2019 (11) TMI 1774X X X X Extracts X X X X X X X X Extracts X X X X ..... ai. 2. In total, the assessee has raised five grounds of appeal. Grounds no.1 and 2, being general in nature, do not require specific adjudication. 3. As regards ground no.5, Dr. P. Daniel, the leaned Counsel for the assessee submitted that the assessee has instructed him not to press this ground. Hence, this ground is dismissed. 4. In ground no.3, the assessee has challenged the addition of Rs. 17,62,963, on account of transfer pricing adjustment relating to sale of goods to the overseas Associated Enterprises (AE). 5. Brief facts are, the assessee, an Indian company, is engaged in the business of procurement of raw materials like diamond, gold, colour stone, silver and platinum from local market and after processing them, exports gold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the arm's length price of the sales effected to the AEs at Rs. 83,98,610, as against the revenue earned by the assessee of Rs. 66,35,648. The resultant shortfall of Rs. 17,62,962, was proposed as upward adjustment to the arm's length price of the transaction with the AEs. On the basis of adjustment proposed by the Transfer Pricing Officer, the Assessing Officer completed the assessment by adding the amount of Rs. 17,62,962, to the income of the assessee. The assessee challenged the aforesaid addition before learned DRP. However, learned DRP also upheld the adjustment made by the Transfer Pricing Officer. 6. The learned Authorised Representative submitted, the assessee has also entered into similar transaction with non-AEs/unrela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction applying CPM, however, in subsequent paragraphs he has observed that the assessee has neither made any transfer pricing study report nor benchmarked the transaction on the plea that the transaction amount is below Rs. 1 crore. Further, the Transfer Pricing Officer has alleged that when called upon to offer his explanation/submissions with regard to the applicability of external TNMM as well as the comparables selected for that purpose, the assessee did not object to it and in this context, the Transfer Pricing Officer has referred to the order sheet entry dated 8th October 2015. Even, learned DRP while dealing with the objections on this particular issue has observed that apart from referring to rule 10B(1)(c) and submitting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upport of its benchmarking applying internal TNMM. Whereas, in the facts of the present case, no such factual information was furnished by the assessee to support the applicability of internal TNMM. At least, no such factual information or detail is forthcoming either from the orders of the Revenue authorities or have been submitted before us by the assessee. In view of the aforesaid factual position, at this juncture, we cannot direct the Assessing Officer to apply internal TNMM by accepting the plea of the assessee. In our considered opinion, assessee's claim of applicability of internal TNMM has to be established by furnishing relevant information/data relating to both AE and non-AE transactions which, as it appears, has not been furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance under section 14A of the Act can be made. However, rejecting the explanation of the assessee, the Assessing Officer proceeded to compute the disallowance under section 14A of the Act by applying the method prescribed in rule 8D, which worked out to Rs. 79,50,776. The disallowance made by the Assessing Officer was upheld by learned DRP. 11. The learned Authorised Representative submitted, since the assessee had not earned any exempt income during the year, the provisions of section 14A r/w rule 8D would not be applicable. In support of such contention, he relied upon the following decisions:- i) Cheminvest Ltd. v/s CIT, [2015] 378 ITR 33 (Del.); and ii) PCIT v/s Ballarpur Industries Ltd., ITA no.51/2016, dated 13.10.2016 (Bom.). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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