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TMI Blog2023 (5) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... d forex losses incurred by the assessee are closely interlinked for this reason. Assessee in the sale price also giving AE benefit of forex fluctuation also. No infirmity in the direction of the LD DRP by including forex loss in the PLI computation of Assessee. Ground is dismissed. Late payment of dues of employees contribution as per respective due dates of the respective Act - HELD THAT:- In view of the decision of Honourable Supreme court in case of Checkmate solutions Services Limited [ 2022 (10) TMI 617 - SUPREME COURT ] this issue is to be decided against the assessee and hence Ground is dismissed. Provision of bad and doubtful debts which is not writing off actual debts - HELD THAT:- As it does not fulfill the condition of allowability as bad debts and hence ld DRP has correctly upheld the order of the ld AO. We dismiss this ground also. Allowance of carry forward losses - HELD THAT:- We set aside this issue to the file of the dl AO that if the necessary conditions are satisfied, the claim of such set off may be examined in accordance with the law. This ground is allowed subject to verification. - ITA No. 387/MUM/2019 - - - Dated:- 3-3-2023 - Shri Prashant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. That Ld TPO/AO have grossly erred in law and on facts and circumstances of the case by rejecting the search process of the assessee without affording any cogent reasons and in introducing the new companies as comparables on wholly erroneous, illegal and untenable grounds. 4.1 That the Ld. TPO/AO have erred in rejecting the assessee s functionally comparables companies and introducing functionally/product-wise incomparable companies. Incorrect computation of PLIs and non-grant of FE adjustment 5. The Ld TPO/AO have grossly erred in law and on facts and circumstances of the case incorrectly computing the PLs of comparables companies by: 1) treating the change in inventories and interest paid on Short term borrowings/working capital loans as non-operating item. b) not allowing foreign exchange adjustment sought by the assessee in accordance with the Rule 10B(3) Incorrect computation of PLIs and non-grant of FE adjustment 6 That Ld. TPO/DRP addition consequently Ld. AO have grossly erred in law and on facts and circumstances of the case in not appreciating that assessee s controlled transactions are at arm s length under the Comparable Uncontr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic etc. The return was picked up for scrutiny. 03. As assessee has entered into international transaction of sale of traded goods to its holding company for commodities private limited BVI amounting to ₹ 4,168,706,476 , sale of traded goods to its associated concern at Dubai DMCC, Mumbai of Rs 35,74,44,143. The assessee has sold non-basmati rice to its holding company amounting to ₹ 391,63,78,384, basmati rice of Rs. 25,23,28,092 and Non basmati Rice to Dubai entity of Rs. 35,74, 44,143/ . The assessee has selected itself as a tested party, adopting transactional net margin method as most appropriate method adopting profit level indicator of operating profit/operating cost which is 3.61% of the assessee. Assessee selected three comparable companies whose margin was computed at 1.70% and therefore the assessee in its TPSR submits that international transaction of the assessee are at arm's-length. 04. The learned transfer-pricing officer held that when CUP method is available assessee has wrongly selected transactional net margin method as Most Appropriate method. Accordingly, he issued a show cause notice stating that transactional net margin method is not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, it was found that there is in ordinary delay in receiving payment for outstanding dues. In some of the cases, the outstanding was extended beyond 60 days and therefore he considered the 60 days as normal credit. And thereafter computed the interest of ₹ 1,069,963. Accordingly the learned TPO made the total adjustment on account of sale of rice of ₹ 75,004,711/ and on account of interest on overdue receivable of ₹ 1,059,963/ by passing an order under section 92CA (3) of the act on 31/10/2017. 07. The learned assessing officer incorporated the adjustment proposed by the learned TPO. The learned AO further found that assessee has delayed payment of employees contribution to the provident fund account amounting to ₹ 107,214 and therefore applying the provisions of section 2 (24) (x) read with section 36 (1) (va) of the act disallowed the above sum. 08. The learned AO further found that assessee has debited provision for doubtful debts of ₹ 61,477,582 which is not allowable. AO further made a disallowance of ad hoc expenditure amounting to ₹ 373 lakhs as assessee did not furnish the requisite information. Accordingly the draft o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tricably linked with sales. On the issue of late payment of provident fund and ESIC dues, he specifically referred to the recent judicial pronouncements as well as the provisions of the law. With respect to the disallowance of provision of doubtful debts, it was submitted that it does not fulfill the requisite condition of its relevance. 013. We have carefully considered contention of learned departmental representative and perused the orders of the lower authorities. 014. Ground no 1 is general in nature Ground no 11 and 12 are consequential and premature and hence dismissed. 015. Ground no 2 is with respect to dispute of transfer pricing adjustment. Assessee claims that Foreign exchange loss is not to be considered as operating expense while computing profit level indicator with respect to the computation of arm's-length price with respect to the sale of agricultural commodities to its associated enterprise. The learned dispute resolution panel has accepted that for benchmarking most appropriate method is TNMM as adopted by the assessee. However the only dispute is with respect to considering the foreign exchange loss of ₹ 56.93 crores debited by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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