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TMI Blog2022 (3) TMI 1501X X X X Extracts X X X X X X X X Extracts X X X X ..... ue in its objection before learned DRP, we do not find any merit in such submission. Appeal of assessee allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2019 and consequentially, final assessment order dated 30.04.2021 passed under section 143(3) read with sections 144C(13) and 144B of the Act is barred by limitation. B. Transfer pricing additions 10. That the TPO / DRP has erred in law in rejecting the transfer pricing documentation maintained by the Appellant and thereby re-determining the arm's length price of the impugned transactions, without appreciating that the circumstances necessitating such redetermination as mentioned in sub-section (3) of section 92C did not exist. 11. That the Authorities below grossly erred on facts and in law in rejecting the combined transaction approach adopted by the Appellant for benchmarking the operating profitability for the period under consideration. 12. That the Authorities below grossly erred in law in rejecting the Transactional Net Margin Method (TNMM) as the Most Appropriate Method (MAM) for benchmarking the operating profitability of the Appellant for the year under consideration. Adjustment of INR 18,90,90,000 on import of components and spare parts from AE's. 13. That the TPO grossly erred in making an adjustment of INR 18,90,90,000 in respect of the import of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the open market. 20. That the Authorities below also grossly erred on facts and in law in not giving adjustments in terms of Rule 10B(3) of the Rules for marine freight & insurance charges and handling charges which are costs borne by the Appellant for import of goods in the related party segment and are not incurred for the purchase of domestic goods in unrelated party segment and such adjustments materially affected the price of such parts in the open market. Adjustment in respect of payment of Royalty-- INR 44,31,78,460/- 21. That the TPO grossly erred in applying the "benefit test" for the purposes of determining the ALP of the international transaction relating to payment of royalty at 1 % against the revenue from Non-AE segment and at NIL against the revenue from AE segment. 22. That the DRP further erred in enhancing the adjustment on account of payment of royalty from INR 27,29,48,460 (as determined by the TPO in respect of the AE segment) to INR 44,31,78,460 (to include the payment of royalty in respect of the Non-AE segment also). 23. That approach of the TPO/DRP to carve out the payment of royalty as a separate international transaction and benchmarkin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the uniform credit policy of the Appellant, no interest was charged from the AE's as well as the Non- AE's in the event of delay in payments. 33. The TPO/DRP erred in fact and in law by re-characterising the outstanding receivables as unsecured loan extended by the Applicant to its AE and benchmark the same as a separate transaction by purported application of Comparable Uncontrolled Price ("CUP") method by applying 6 months LIBOR Plus 400 basis. C. - Corporate tax addition Disallowance of payment of Royalty amounting to INR 17,02.30,009/- 34. That the Final Assessment order is patently bad in law since it miserably fails to consider that given the enhancement made by the DRP qua the TP adjustment relating to royalty payments, there arose no question of making a double disallowance under section 37 of the Act. 35. That the DCIT grossly erred in disallowing the royalty under section 37 of the Act amounting to INR 17,02,30,000/- paid by the Assessee to Honda Motor Japan ('HMJ') under the license agreement dated 01.09.2010. 36. That the DCIT grossly erred in fact and in law while coming to the conclusion that the Agreement between the Assessee and HMJ was only to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, he submitted, the time limit for assessment in case of non-eligible assessee, having expired on 31.12.2019, the final assessment order passed under section 143(3) read with section 144C(13) on 30.04.2021 is barred by limitation. In support of such contention, he relied on the decision of the Hon'ble Delhi High Court in its own case, citation being, Honda Cars India Ltd. Vs. DCIT, (2016) 67 taxmann.com 29 (Del). 6. Vehemently opposing the contentions of learned counsel for the assessee, learned Departmental Representative submitted, after intimation of amalgamation on 27.11.2019, the draft assessment order was passed by mentioning the correct name of the assessee. He submitted, while objecting to the draft assessment order, the assessee did not raise any objection before learned DRP that the TPO has passed the order in the name of non-existing entity. He submitted, even, while complying with the directions of learned DRP, the TPO has passed his final order on 30.04.2021 mentioning the correct name of the assessee. He submitted, in the final assessment order also, the Assessing Officer has mentioned name of both the amalgamated company and the amalgamating company and has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the name and address of the assessee and PAN as under: 10. However, while completing the assessment under section 144C(13) in pursuance to the directions of learned DRP, the Assessing Officer has passed the order on 12.02.2021 mentioning the PAN and name of the assessee as under: Name of the assessee : 'Honda Motor India Pvt. Ltd.' PAN : AABCG7526E. 11. Thus, it is patent and obvious from the name of the assessee and PAN, as mentioned in the final assessment order, for all intent and purpose, the final assessment order has been passed in the name of 'Honda Motor India Pvt. Ltd.', the erstwhile entity, which after amalgamation lost its existence. The fact that the departmental authorities were conscious of the amalgamation of 'Honda Motor India Pvt. Ltd.' with the present assessee, viz., 'Honda Cars India Ltd.' from the very initial stage of proceeding before the TPO would be evident from the following observations of the Assessing Officer in the draft assessment order passed under section 143(3) read with section 144C of the Act on 31.12.2019: "…….It is pertinent to mention here that consequent to scheme of amalgamation as approved by the Hon'ble Nationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACH1765Q][As Successor in interest of erstwhile Honda Motor India Private Limited (PAN AABCH7526E) since amalgamated] 409, Tower B, DLF Commercial Complex, Jasola, New Delhi-110025 for the assessment proceeding under consideration. In view of the same, the draft assessment order for AY 2016-17 is being passed in the name of the amalgamated entity M/s Honda Cars India Limited [PAN: AAACH1765Q] [As Successor in interest of erstwhile Honda Motor India Private Limited (PAN AABCH7526E) since amalgamated]. For the sake of clarity, it is again submitted that 'the assessee' in this entire order refers to M/s Honda Cars India Limited [PAN: AAACH1765Q][As Successor in interest of erstwhile Honda Motor India Private Limited (PAN AABCH7526E) since amalgamated]……" 12. Keeping in perspective the factual aspect of the issue, we need to examine the legal position. In case of PCIT Vs. Maruti Suzuki India Ltd.(supra), in pursuance to a scheme of amalgamation approved in the court of law, 'M/s. Suzuki Powertrain India Ltd.' merged with 'M/s. Maruti Suzuki India Ltd.'. However, in the notice initiating assessment proceeding as well as final assessment order, the Assessing Officer menti ..... 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