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TMI Blog2025 (1) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... AO/TPO to benchmark the international transactions based on the additional evidences brought on record by the assessee as per law after giving proper opportunity of being heard to the assessee. Accordingly, ground no.3 raised by the assessee is allowed for statistical purposes.
Sundry creditors outstanding shows that there is an enhancement in the trade payables/creditors from the preceding years - We observed that the relevant confirmations and explanations were not readily available during assessment proceedings. However, it is brought to our notice that all the confirmations and other details are available, accordingly ld. AR of the assessee prayed that the same may be accepted and remitted the same before the Assessing Officer to verify the relevant information available on record. In this view of the matter, we remit the issue to the file of the AO to verify the relevant information available on record and then decide the issue as per law after giving proper opportunity of being heard to the assessee. Accordingly, ground no.4 raised by the assessee is allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... tal income. 4.1 The AO erred on fact and in law in making an addition of Rs. 5,15,68,635 on account of increase in sundry creditors-holding that the confirmation from the creditors was not filed by the appellant before the AO, ignoring the confirmations filed before him. 4.2 The AO/TPO erred on fact and in law in holding that the appellant failed to provide the identity and genuineness of transactions, completely ignoring the fact that the list of creditors and confirmation of M/S Macmillan Distributor was filled before the Assessing Officer. 4.3 The DRP-1/National e-Assessment Center erred on fact and in law in sustaining the addition of Rs. 5,15,68,635/- on account of increase in sundry creditors- despite the confirmation of all the creditors was filed before the DRP-1. 4.4 The DRP-1/National e-Assessment Center erred on fact and in law in sustaining the addition of Rs. 5,15,68,635/- on account of increase in sundry creditors- by holding that the appellant has failed to substantiate the financial crises and evidence that the import payment was difficult. 5. Interest U/s 234B. 234C and 2340 of the Income Tax Act 1961 5.1 The DRP/National e-Assessment Center New Delhi e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Income on Services rendered to AE's TNMM 27,42,082 1. Class IV Transactions : Reimbursement of expenses (receivable) TNMM 20,23,544 1. Class V Transactions : Reimbursement for support services (payable) TNMM 75,02,029 1. Class VI Transactions : Deemed International Transactions Purchases from : 1. Macmillan Distributors Ltd. 2. Holtzbrink Publishers 3. Marston Publishers TNMM 8,95,18,658 1,64,989 13,995 9. The TPO verified the Class-VI transactions relating to purchases of books from Macmillan Distributors Ltd., Holtzbrink Publishers and Marston Publishers. The assessee has submitted operating profit from the trading of books submitted in its TP study and the same are reproduced below :- Particulars Bloomsbury Publishing India Pvt. Ltd. Books Purchases from MDL Transactions other than AE Total Transactions (Rs. in Lacs) Turnover A 1582.17 379.08 1961.27 Export Incentives - 0.93 0.93 Adjusted Sales A1 1582.17 380.01 1962.19 Increase in Stock B 159.72 38.27 197.99 Raw Materials A 896.98 214.91 1111.89 Power & Fuel B - - - Other Manufacturing expenses C - 152.82 152.82 Employee Cost D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions before the ld. DRP-1, New Delhi. After considering various objections of the assessee, finally TPO proposed 6 comparables and the final assessment order was passed with the following TP adjustment with final comparables. The same are benchmarked as under :- S.No. Company Name OP/OR 1. India Book Distributors (Bombay) Ltd. 0.53% 2. Nova Publication India Ltd. 1.45% 3. GBS Publishers & Distributors Pvt. Ltd. 3.88% 4. Harvard Business School Publishing India Pvt. Ltd. 7.15% 5. Informatics India Ltd. 22.43% 6. Vikram Publishers Pvt. Ltd. 7.59% Particulars Amount in Lakhs Operating Revenue of the assessee 1582.17 Arm's Length OP/Or 5.52% Arm's Length Profit 87.34 Operating Profit of the assessee 28.27 Difference between ALP and reported margin 59.07 14. Aggrieved with the above, assessee is in appeal before us. 15. At the time of hearing, ld. AR of the assessee filed additional evidences with the prayer that in the TP study, the assessee submitted that the assessee has computed the operating net margin of the assessee company applying the profit level indicator of OP/OR which it computed to 1.79% from the segment of "books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the assessee company at 5.52% being the median of the final set of comparables (after incorporating DRP directions) as the assessee OP/OR of 1.79% from the segment of (traded books) was less than the 35th and 65th percentile of the comparables. 15.4 He further submitted that the Arm's Length Range i.e. 35th percentile and 65th percentile of the comparable companies considered by the TPO/NFAC in the final set in his order falls between to 3.88% to 7.15%. The OP/OR of the trading segment as computed by the assessee in the revised segmental accounts is 7.08%, which is well within the Arm's Length Range computed by the TPO and the Audited revised segmental account is attached with this application as Annexure 1. 15.5 As stated above, he submitted that assessee is in business of publishing and trading of books and other related services and it has purchased books primarily from Macmillan Distributor (MDL) MDL is the worldwide distributor of Bloomsbury PLC UK who supply books to assessee and also to third parties in India. MDL offers discounts on the print price of the books to assessee and third- party customers in India. He submitted that on the sales made to third parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and no discount rate is written on them. He submitted that the website of the BPBLC has a search feature of finding a book by ISBN and the assessee has picked the ISBN of the book from the invoices and searched it on the website of BPPLC, which shows the print price matching with the prices mentioned in the invoices. He submitted that in the case of third party billing, the discount provided comes to between 45%-65% which is also demonstrated by the net prices of the title as mentioned in such invoices. In case of invoices raised on assessee, the discount provided comes 70% and above which can be verified by the process of finding the print price on the website of BPPLC and the net price charged in the invoice and in this regard, he referred to Annexure 4 attached with the application. 15.9 Ld. AR submitted that the above verification is imperative because the Assessee's than counsel representing before the TPO did not file such important document to establish the Arm's Length nature of the transaction of trading of books. However, he submitted that since the present appeal is yet to be adjudicated and the conclusions of Hon'ble Bench are likely to influence by non sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious invoices in support of the above submissions in the form of additional evidences. He prayed that both the issues may be remitted back to AO/TPO for verification and proper information of the facts on record to benchmark the international transactions. 19. On the other hand, ld. DR of the Revenue objected to the filing of additional evidences at this stage and the assessments were completed based on the information provided by the assessee and available on record. However, he has not objected additional evidences considering the fact that the nature of business and functions are exactly similar and he prayed that this issue may be remitted back to AO/TPO for proper verification. 20. Considered the rival submissions and material placed on record. We observed that transactions and FAR of the assessee are similar to AY 2021-22 and as per the records brought to our notice, there is no change in the activities carried out by the assessee in the current assessment year and subsequent assessment years. It is brought to our notice that the assessee has filed the segmental report at the time of TP study, however the data was incomplete. Therefore, the TPO rejected the TP study submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . DRP and on the direction of the ld. DRP, the same was considered while passing the final assessment order. In absence of non-availability of confirmations,, the addition was sustained in final assessment order. 23. Aggrieved, assessee is in appeal before us. 24. At the time of hearing, ld. AR submitted that the relevant confirmations and explanations were readily available during assessment proceedings and now he submitted that all the relevant evidences of the transactions which are regular business transactions and the relevant confirmations are available on record and he prayed that the same may be accepted and remitted the same before the Assessing Officer to verify the relevant information available on record. 25. On the other hand, ld. DR has no objection to remit this issue back to the file of Assessing Officer. 26. Considered the rival submissions and material placed on record. We observed that the relevant confirmations and explanations were not readily available during assessment proceedings. However, it is brought to our notice that all the confirmations and other details are available, accordingly ld. AR of the assessee prayed that the same may be accepted and rem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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