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TMI Blog2023 (8) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... lity analysis, which was directed to be excluded. Matter is being again restored to the file of the Ld. TPO for carrying out a fresh benchmarking analysis in light of the observations made by Hon ble ITAT [supra]. In the result, the matter is being restored to the file of Ld. TPO with the above directions. - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : Shri Dhanesh Bafna Shri Pratik Shah, A.Rs. For the Respondent : Dr. Darsi Suman Ratnam, CIT D.R. ORDER PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: Both these appeals have been filed by the assessee against the order passed by the Ld. Dispute Resolution Panel-2, (in short Ld. DRP ), Mumbai vide orders dated 21.08.2017 27.06.2018 passed for Assessment Years 2009-10 2010-11. 2. Since common issues are involved for both the years under consideration, the appeals are disposed of by way of a common order. 3. The assessee has taken the following grounds of appeal:- Assessment Year 2009-10:- 1. On the facts and in the circumstances of the case and in law, the Learned Assistant Commissioner of Income-tax, Circle-2(1)(2), Vadodara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be provided to the assessee in accordance with law. 5. In proceedings before DRP the assessee submitted that while completely the comparability analysis, the Assessing Officer adopted the export filter of 50% as a result of which the only one company i.e. GTN Engineering Ltd. was taken as a comparable. The assessee placed reliance on several judicial precedents to support it s contention that only one comparable cannot represent the entire industry and therefore, the same needs to be rejected. According to the assessee, if sufficient comparables are not available then the threshold limit should be relaxed so as to have a fair analysis of the matter. Further, the assessee also objected to inclusion of GTN Ltd. while making the comparability analysis on the ground that GTN Ltd. is a contract manufacturer whereas the assessee is a licensed manufacturer and is exposed to higher risk as compared to a contract manufacturer. Further, GTN serves to only one customer i.e. FMC, whereas the assessee serves multiple customers. Further, the assessee submitted that GTN is able to pass on the cost escalation in material inputs with increasing off take of valves and other products whereas th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en at the cost of comparability. Without prejudice to the above observations, the DRP also rejected the assessee s contention that even if the export filter is taken at 25%, GTN and Tyco Sanmar Ltd. are still liable to be included. DRP was of the view that the contention of the assessee that are RPT to sale ratio of Tyco is higher than 25% is found to be factually incorrect. The assessee has itself admitted that such transactions have not been reported as related party transactions in the Annual Report of Tyco. Accordingly, the DRP held that both GTN and Tyco cannot be excluded from the set of comparables even if the alternative exercise done by the TPO by applying the export sales filter at 25% were to be adopted. 6. The assessee is in appeal before us against the order passed by Hon ble DRP, holding that in the instant facts, Ld. TPO was justified in taking export filter of 50% and thereby including only one comparable i.e. GTN India to determine the Arm s Length Price of the assessee and holding that in the instant facts, only the GTN represents the industry standards. The Counsel for the assessee submitted that the Hon ble ITAT had given a specific direction to exclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant extractions of the observations made by ITAT while passing the order in assessee s own case for A.Y. 2009-10 in ITA No. 828/Ahd/2014 vide order dated 30.08.2015 in which the ITAT observed as under:- 5.2. We have given our thoughtful consideration to the rival contentions, facts of the present case and material available on record. The undisputed facts remain that the Transfer Pricing Officer as well as a DRP have rejected the transfer pricing study conducted by the assessee and comparables adopted for computing the arm s length price. The TPO carried out his own study restricting the study to a single financial year as per the Rule of 10B(4) of the Income Tax Rules, 1962 (hereinafter referred to as the Rules). The TPO also rejected the comparables on the basis that the pumps and valves cannot be compared. However, while conducting the transfer pricing study, the AO compared the assessee with industries which were engaged in the manufacturing of valves . During the course of hearing, it was pointed out by the ld.counsel for the assessee that the valves that are sought to be compared by the TPO are functionally different, entirely a different product, although it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee is allowed for statistical purpose. ITA No. 2503/Ahd/2018 (Assessment Year 2010-11):- 10. The assessee has taken the following grounds of appeal:- Ground No.1 Transfer Pricing adjustment INR 6,64,11,722/- 1. On the facts and in the circumstances of the case and in law, the Learned Assistant Commissioner of Income-tax, Circle-2(1)(2), Baroda ( the Ld. AO ) under the directions of Honourable Dispute Resolution Panel ( Hon ble DRP ), erred in making an adjustment of INR 6,64,11,722/- in relation to the international transaction of sale of goods to Associated Enterprises ( AE ). It is prayed that the additions made by the Ld. AO in relation to the international transaction of sale of goods to AEs be deleted. 2. On the facts and circumstances of the case and in law, the Ld. AO under the directions of Hon ble DRP erred in not allowing the benefit of + 5% range as per Section 92C(2) of the Income-tax Act, 1961 ( the Act ) in relation to the international transaction of sale of goods to AE. It is prayed that the Ld. AO be directed to grant range benefit in accordance with law. Ground No. 2 Interest under section 220(2) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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