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TMI Blog2024 (9) TMI 1096X X X X Extracts X X X X X X X X Extracts X X X X ..... to ARBL and to itself are different and that the segmental accounts of LPTPL is not reliable as it is not audited. Accordingly, the DRP rejected the application of internal TNMM method. It therefore emerges that the segmental financial statement being presented before us as additional evidence, was furnished by the assessee during the proceedings before the DRP. DRP had rejected the same on the ground that the segmental accounts of LPTPL with regard to ARBL segment and the assessee segment were not audited, and hence not reliable. This segmental financial statement has now been certified by an independent accountant and being produced before the Tribunal as additional evidence. We are of considered opinion that the segmental financial statement will facilitate proper appreciation and comparison of the transactions entered into with ARBL and itself. Rule 29 of the ITAT Rules, we are of the opinion that this segmental financial statement has direct bearing on the issue of deciding the method to be adopted to determine the Arms Length Price. Without considering the segmental analysis of the transaction for comparison of operating profitability on cost of sale made by company to LPTPL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal financial statement before the Hon'ble DRP to substantiate that transaction with respect to sale of goods to LPTPL was undertaken at arm's length price. However, the Hon'ble DRP rejected the segmental financial statement on account of not being reliable in nature. In this regard, it is humbly submitted that to address such rejection, the Appellant now wishes to respectfully submit the segmental financial statement before your Honour which is certified by an independent accountant as additional evidence under Rule 29 of the Rules, for proper adjudication of the captioned case. It may be appreciated that said additional evidence is vital and essential for the proper disposal of above-referred grounds of appeal and hence the Appellant humbly requests the Hon'ble Bench to kindly consider them in the interest of substantial justice. 5. The ld. counsel for the assessee placed strong reliance on the decisions of the following High Court cases: i) CIT v. Kum. Satya Setia, [1983] 15 Taxman 345 (MP) ii) Anaikar Trades Estates (P). Ltd v. CIT, [1991] 56 Taxman 170 (Mad) iii) R.S.S. Shanmugam Pillai Sons v . CIT, [1974] 95 ITR 109 (Mad.) iv) CIT Vs Text Hundred India Pvt L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary for proper adjudication of the matter. 11. The representatives of both the sides were heard at length, the case records carefully perused and with the assistance of the ld. Counsels, we have considered the documentary evidences brought on record in the form of a letter from the CA dated 27.10.2021 in light of Rule 29 of ITAT Rules and have also perused the judicial decisions relied upon by both the sides. 12. Having heard the rival submissions, we find that in the instant case, the assessee, for benchmarking the specified domestic transaction of purchase of goods by the assessee to its AE, Luminous Power Technologies Pvt Ltd (LPTPL), has considered internal TNMM as most appropriate method. The assessee has taken the operating profitability on cost for sale made to the third party Amar Raja Batteries Ltd (ARBL) for comparison. On the basis of the TPO report, the DRP held that the products sold by LPTPL to ARBL and to itself are different and that the segmental accounts of LPTPL is not reliable as it is not audited. Accordingly, the DRP rejected the application of internal TNMM method. 13. It therefore emerges that the segmental financial statement being presented before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the ITO and the AAC, the Tribunal had the jurisdiction in the interest of justice to allow the production of such vital documents. 16. The decision of the Hon'ble Madras high Court in the case of R.S.S. Shanmugam Pillai Sons v. Commissioner of Income-tax, [1974] 95 ITR 109 (MAD.) similarly was held as under: It is no doubt true that the Tribunal has got a discretion either to admit the documents as additional evidence or to reject the same at the stage of the appeal. But he said discretion cannot be exercised in an arbitrary manner. If the Tribunal finds that the documents filed are quite relevant for the purpose of deciding the issue before it, it would be well within its powers to admit the evidence, consider the same or remit the matter to the lower authorities for the purpose of finding out the genuineness of the letters and considering the relevancy of the same. But if the Tribunal finds that the evidence adduced at the stage of the appeal is not quite relevant or that it is not necessary for the proper disposal of the appeal before it, in that case, the Tribunal could straightaway reject the evidence, which was sought to be produced for the first time at the stage of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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