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TMI Blog2019 (7) TMI 1999X X X X Extracts X X X X X X X X Extracts X X X X ..... osition and subject to the verification of these claims of the assessee by the Assessing Officer, the figure of 6.01% should be taken as PLI of the assessee at the entity level. In that case, no adjustments are required in view of the facts that the average of PLI of the comparables qua the assessee s profits margin, fall within the range of +/-5% of the ALP. TPO/Assessing Officer is directed to verify the above figures of PLI of the assessee after giving opportunity to the assessee as per the settled principles of natural justice. Prior period expenses - treating the rebate allowed to a customer as prior period expense and thereby disallowing the same - HELD THAT:- As evident that the relevant sales took place and duly accounted in the boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roneously considered the PLI of 3.87%. On these facts, the AR for the assessee submitted for adjudication of the ground no. 4 of the assessee's appeal first is appropriate. If the same is allowed in favour of the assessee, the adjudication of other TP grounds becomes an academic exercise only. Accordingly, we proceed to adjudicate the ground no. 4 first and the same reads as under :- "4. Not granting the benefit of permissible range of +/-5% Erred in computing transfer pricing adjustment by not granting the benefit of the permissible range of +/-5% available to the Appellant under proviso to section 92C(2) of the Act and thereby erroneously concluding that the international transaction of the Appellant is not at arm's length." 4. Briefly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order u/s.143(3) r.w.s. 144C(13) of the Act dated 20.09.2010. In the said assessment order, the total income of the assessee was determined at Rs. 13,91,00,800/- which included the TP adjustment of Rs. 4,73,14,991/- and other additions. 5. Aggrieved with the orders of the Assessing Officer/TPO/DRP, the assessee filed an appeal before the Tribunal in the first round. 6. In the first round of proceedings before the Tribunal, vide ITA No. 1328/PN/2010 dated 27.06.2014, the Tribunal restored the issue back to the file of the DRP and thus, allowed the appeal of the assessee for statistical purposes. Thus, the issue travelled to the file of the DRP for second time for want of a speaking order/direction on the issues. 7. During the rema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the PLI of the assessee as determined by the TPO is 6.01% against the PLI of 8.90% of the comparables. The benefits of the provisions of section 92C(2) of the Act i.e. (+/-5%) is available to the assessee. If the same are considered, the TPO should not have made TP adjustment if any as the difference of PLIs falls in the range of +/-5%. Contrary to the same, the addition of Rs. 4,94,95,000/- came up in view of the fact that the TPO/Assessing Officer erroneously considered the assessee's PLI at 3.87%, which is patently erroneously and the same is not based on the facts. In this regard, ld. Counsel brought our attention to the contents of para 4.9 of the directions of the DRP where the assessee's PLI is recorded as 6.01% only and not the 3.87 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer/TPO. Considering the said factual position and subject to the verification of these claims of the assessee by the Assessing Officer, the figure of 6.01% should be taken as PLI of the assessee at the entity level. In that case, no adjustments are required in view of the facts that the average of PLI of the comparables qua the assessee's profits margin, fall within the range of +/-5% of the ALP. The TPO/Assessing Officer is directed to verify the above figures of PLI of the assessee after giving opportunity to the assessee as per the settled principles of natural justice. Accordingly, the arguments raised by the assessee in the relevant ground no. 4 are allowed as above. 12. Considering the relief granted in the ground no. 4, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that rebate has been given on the sales amount of the earlier year in the current year. However, no evidence regarding applicability of such rebate on the sales amount have been furnished. It is submitted that the rebate was passed on due to decrease in price. However, once the sale is executed in a particular year, i.e. A.Y. 2005-06, it is not understood as to how the subsequent decrease in prices can be accommodated as rebate later on, despite the sales already executed. Therefore, considering the overall facts of the case, this objection is dismissed." 15. From the above, it is evident that the relevant sales took place and duly accounted in the books in the assessment year 2005-06 and the assessee made an adjustment by way of rebate t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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