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TMI Blog2024 (8) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee treating the foreign exchange gain/loss as operative for the assessment years between 2015-16 and 2020-21, except 2017-18, being borne on record before the TPO such an argument is not at all helpful to it. Observation of the CIT(IT TP) that at the cost of consistency and bonafide intention, only to cause leak of revenue, the assessee adopted a different criterion for the assessment year 2017-18 goes undisturbed and its non-verification by the learned TPO is fatal to the assessment proceedings. We are of the considered opinion that non-considering of the consistent treatment given by the assessee to the foreign exchange gain/loss either prior or subsequent to 2017-18 amounts to error insofar as it is prejudicial to the interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the assessee with the Associated Enterprises (AEs) the determination of the Arm s Length Price (ALP) was referred to the learned TPO and in respect of interest on delayed receivables, the learned TPO suggested an upward adjustment to the tune of Rs. 18,46,834/-. 3. During the proceedings before the learned TPO, learned TPO proposed to consider the foreign transactions (gain/loss) as operating in nature. The assessee while placing reliance on the decision of the Co-ordinate Benches of the Tribunal in the cases of Bucher Hydraulics Private Limited in ITA No. 124/Del/2017 and DHL Express (India) Private Limited vs. ACIT in ITA No. 7360/Mum/2010 and submitted that the foreign exchange loss on account of realization of foreign currency r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 263 of the Act, learned PCIT informed the learned CIT(IT TP) that the jurisdiction to proceed under section 263 of the Act vests with the learned CIT(IT TP) and, therefore, learned CIT(IT TP) proceeded with the proceedings under section 263 of the Act. 7. Learned CIT(IT TP) noticed that for all the years between 2015-16 and 2020-21, except the assessment year 2017-18, the assessee considered the foreign exchange loss as non-operating while computing the ALP margin. Learned CIT (IT TP) further noticed that the learned TPO failed to consider the following tests to be applied for determining the nature of foreign exchange gain or loss : (i) Foreign Exchange Gain/Loss, to the extent it relates to or connected with the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exchange loss by carrying out benchmarking of the same, afresh, after affording adequate opportunity to the assessee of being heard. 9. Aggrieved by such an order, assessee preferred this appeal stating that when there was an enquiry, the learned CIT(IT TP) cannot invoke jurisdiction under section 263 of the Act and since in this case there was enquiry by the learned TPO on this aspect, the issue relating to the treatment of foreign exchange loss as operating in nature, cannot be taken up under section 263 of the Act. Learned AR invited our attention to paragraph No. 10.2.3 of the notice dated 18/01/2021 issued by the learned TPO and also the reply given by the assessee. He, therefore, submits that when once all the record is available be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph No. 10.2.3 and also in the reply dated 25/01/2021 given by the assessee at paragraph No. 13, the consistency of assessee treating the foreign exchange gain/loss as operating or non-operating did not fall for consideration. Only certain case law were discussed. But the fact remains that, as admitted by the assessee itself, except the assessment year 2017-18, for all the years between 2015-16 and 2020-21, the assessee treated the foreign exchange gain/loss as operating, but only for the assessment year 2017- 18, the assessee treated the same as non-operative. No plausible reason is given by the assessee for this deviation nor did the learned TPO deal with the same. 12. Facts are nine tenths of law and before applying any precedent, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he years between 2015-16 and 2020-21, except 2017-18, the foreign exchange gain/loss is operating and it is only for the assessment year 2017-18 it is non-operating, and that too without justifying such an action, basing on admissible facts. Consistency is the prime factor to ascertain the intention of the assessee in giving treatment to the foreign exchange gain/loss. We can understand if the assessee takes either of the view, but consistently. 15. With this view of the matter, we are of the considered opinion that there is no strength in the argument of the learned AR that the assessee placed before the learned TPO all the material sufficient to take a view and, therefore, the assessee cannot be put to peril for the learned TPO not consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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