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TMI Blog2024 (1) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant assessment year and further it has diversified activities and therefore functionally dissimilar to that of the assessee company. Appeal filed by the assessee is treated as allowed. - SHRI B.R. BASKARAN (AM) SHRI NARENDER KUMAR CHOUDHRY (JM) For the Appellant : Shri Dhanesh Bafna, Ms. Chandni Shah Shri Yogesh Malpanil For the Respondent : Shri Ashish Kumar ORDER Per B.R. Baskaran (AM) :- The assessee has filed this appeal challenging the assessment order dated 30-10-2017 passed by the assessing officer u/s 143(3) r.w.s 144C(13) of the Act in pursuance of directions given by Ld Dispute Resolution Panel (DRP). 2. The grounds of appeal urged by the assessee read as under:- On being aggrieved by the order dated October 30, 2017 of the learned Asst. Commissioner of Income-tax, Circle -1, Thane [ AO ] passed under section 143(3) read with section 144C(13) of the Income tax Act, 1961 ( the Act ) as also directions issued by the Dispute Resolution Panel -I, Mumbai ( DRP ), present appeal is being preferred on the following grounds amongst others which, it is prayed, may be considered without prejudice to one another. 1. On the facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case and in law, the learned AO erred in proposing an adjustment of Rs. 7,37,323/- towards Corporate Social Responsibility. The appellant prays that adjustment of Rs. 7,37,323/- towards Corporate Social Responsibility be deleted. 6. On the facts and circumstances of the case and in law, the learned AO erred in proposing an adjustment of Rs. 21,714/- towards interest income. The appellant prays that adjustment of Rs. 21,714/- towards interest income be deleted. The above grounds are without prejudice to each other. The appellant craves leave to add, alter, amend or withdraw all or any of the Grounds of Appeal herein and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing. 3. The facts relating to the case are set out in brief. The assessee is engaged in the business of manufacturing and trading of specialty chemicals and Chemical Intermediaries. It is a subsidiary of M/s Lanxess Deutschland GmbH. It has got three manufacturing units located in India, viz., Madurai, Nagda and Jhagdia. The assessee had entered into many international transactions and hence the AO referred the matter of determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- (a) Firmenich Aromatics Production (India) P Ltd vs. ITO (ITA No.7145/Mum/2017) (b) Amphenol Interconnect India P Ltd vs. ACIT, Pune (2019)(105 taxmann.com 382)(Pune). In view of the above, consistent with the view taken in the earlier year, we set aside the transfer pricing adjustment made in the manufacturing segment and direct the TPO/AO to re-compute ALP of that segment under TNM method. 6. In Ground no.3, the assessee is objecting in not excluding certain expenses treating them as non-operational in nature. The Ld A.R submitted that this ground may be treated as academic, if ground no.1 2 of the assessee is decided in its favour. Since we have decided the first two grounds in favour of the assessee, there is no necessity to adjudicate ground no.3 as submitted by Ld A.R. 7. Ground no.4 is related to the transfer pricing adjustment made in respect of fees paid for technical support services. The assessee has provided IT technical support services to its Associated Enterprises. It benchmarked the transactions under TNM method by selecting 9 comparable companies. It selected OP/TC (Operating Margin/Total Cost) as Profit level Indicator (PLI). The margin earned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val contentions and perused the record. The limited issue which arises is against benchmarking of ALP of the IT(TP)A No. 2299/Mum/2017 international transactions on account of provisions of Oracle Support Services (JT-enables services) by assessee to its associated enterprise and for benchmarking of ALP of the international transactions to the said concern ie. Excel Infoways Ltd. which has been finally selected by the DRP, is to be excluded since it is showing fluctuating margins. It is further observed that the operating margin of the company had shown drastic fluctuations ranging from 247.74% in F.Y. 2008-09 to 2% in FY 2014-15. The assessee has pointed out the margins shown by the said concern were as under: Financial Year OP/TC margin 2008-09 247.74% 2009-10 267.31% 2010-11 238.71% 2011-12 41.48% 2012-13 75.70% 2013-14 30% 2014-15 2% 19. We find that the Tribunal in assessee's own case in assessment years 2011-12 2012-13 vide para 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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