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TMI Blog2024 (4) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income Tax Act, 1961 (the Act) concerning AY 2013-14. 2. The grounds of appeal raised by the assessee read as under: "1. Whether on facts and in circumstances of the case, the CIT(A) has erred in directing to exclude "Roto Pumps" from the final list of Comparables without appreciating the facts on the basis of which this company was included in the final list of Comparable by the TPO" 2. Whether on facts and in circumstances of the case, the CIT(A) has erred in directing to exclude "Simmonds Marshall Ltd.' from the final list of Comparables without appreciating the facts on the basis of which this company was included in the final list of Comparable by the TPO. 3. Whether on facts and in circumstances of the case, the CIT(A) has er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more companies statedly engaged in manufacturing assembly of similar products in addition to the companies selected in the TP study report filed by the assessee for the purposes of benchmarking the international transactions and for arriving at arm's length price of sale of finished goods. Based on the inclusion of the new comparables, the TPO proposed adjustment of Rs. 3,45,20,524/- while determining computation of arm's length price. The AO accordingly adopted the TP adjustment recommended by the TPO while framing the assessment order dated 10.01.2017 under Section 143(3) r.w. Section 144C of the Act and enhanced the returned income by such proposed adjustment. 4. Aggrieved, the assessee preferred appeal before the CIT(A). Before the CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the appellant pertaining to the application of TNMM method and rejection of segmental accounts by the AO/TPO. The specific contention of the appellant are discussed as follows: - (A) The appellant has submitted that the AO/TPO had erred in modifying the transfer pricing analysis of the appellant and including three more comparables. The appellant has objected to the following comparables: (i) Roto Pumps: (a) The main contention of the appellant is that the above mentioned company manufactures centrifugal pumps which are not used in auto industry but are used in other sectors. The appellant has submitted that the above-mentioned company manufactures pumps mainly for non-auto sector such as oil, gas, sugar, marine, chemicals, food ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had ignored the capacity utilisation adjustment submitted by the appellant during the course of assessment proceedings. The appellant has not submitted any data regarding the capacity utilisation of the comparable companies selected in the final set. While the contention of the appellant may be theoretically correct, it is not possible to uphold the same as the appellant has not compared the capacity utilisation of the comparable companies with itself. In view of the same the contention of the appellant is not accepted. The contention of the appellant is accordingly disposed off. (C) The appellant has submitted that the AO/TPO calculated the profit level indicator on the basis of current data and did not take into account previous two ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies in dispute namely, Roto Pumps and Simmonds Marshal Ltd. are engaged in totally dissimilar business and financials of such comparable companies selected by the TPO would give wholly incongruent results owing to overwhelming product dissimilarity. The AO/TPO to our mind wrongly modified transfer pricing analysis of the assessee by wrongfully including these two companies with inherent dissimilarity. The CIT(A) has set right the glaring error committed by the AO/TPO. We thus see no reason to interfere with the finding of facts arrived at by the CIT(A). The grievances raised by the Revenue as per its grounds no.1 and 2 are thus devoid of any merit. Hence, we decline to interfere. 10. Grounds No.1 and 2 of the Revenue's Appeal are thus dism ..... X X X X Extracts X X X X X X X X Extracts X X X X
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