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TMI Blog2019 (3) TMI 2080X X X X Extracts X X X X X X X X Extracts X X X X ..... AO to grant depreciation at the rate of 60% on printers for the Asst Year 2012-13. The Ground No. 9 raised by the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... The services performed by the Assessee in respect of export consignments and import consignments are: - - Origination services: These are the services in relation to pick-up and delivery of cargo from Indian consignor to the Indian port; and - Destination services: These are the services in relation to pick-up and delivery of cargo from Indian port to Indian consignee. 3.1. During the course of performing the above activities, the assessee pays / receives freight, terminal handling and other charges to / from Associated Enterprises (`AEs'). Depending on the International commercial terms (Inco terms) agreed between the consignor and consignee of each transaction, the origination and destination services performed by the assessee could be billed to an Indian consignor / consignee or billed to Damco overseas affiliates. 3.2. The international transactions as mentioned in Form 3CEB of the assessee for the year under consideration and in the immediately preceding assessment year re as under:- Sr. No. Nature of International Transaction Value of transaction (Rs.) A.Y. 2012-13 Value of Transaction (Rs.) A.Y. 2011-12 1. Receipt of freight and other charges 52,08,78,792 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TPO, since G is more than I in the aforesaid table, the assessee's NPM does not fit within +/- 5% leeway available. Accordingly, the ld TPO made an adjustment to ALP at Rs. 25,22,63,069/- in the order passed u/s 92CA(3) of the Act dated 25.01.2016. 3.5. The assessee submitted before the ld DRP that only the transactions with AE are to be considered for determination of ALP and accordingly provided the following workings before the ld DRP :- Working of Adjustment by taking into account onlyAE related cost Particulars Amount in INR Adjustment by the TPO on an entity level basis Operating Revenue of the Assessee A 718,14,02,537 NPM as alleged by the TPO B 5.84% ALP Total Cost as alleged by the TPO C 676,20,08,629 Actual Total cost of the Assessee D 701,42,71,698 Adjustment as per the TPO E=D-C 25,22,63,069 Proportionate adjustment on AE cost only (The Assessee's contention) Total transactions with AEs (expenses) F 376,04,72,870 Actual Total cost, including AE and Won AE Costs D 701.42,71,698 Proportion of AEs cost to Total cost G=F/D 53.61% Proportionate Adjustment H=G*E 13,52,42,612 +/- 5 percent computation Total transactions with AEs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. (c ) was admitted by the Hon'ble Supreme Court and notice ordered to be issued to both the parties. The ld AR drew our attention that Question No. (c ) which was admitted by Hon'ble Apex Court was not on the impugned issue and was on the issue of disallowance u/s 14A of the Act. For the sake of convenience, the questions that were raised before the Hon'ble Bombay High Court are reproduced hereunder:- "(a) Whether, on the facts and in the circumstances of the case and in law, the Tribunal is justified in restricting the adjustment only on international transactions where the assessee has selected TNMM and applied the same on entity level because presumtpion underlying arms length principle is that uncontrolled transactions are at arm's length, and therefore, if the overall margins are less than arm's length margins, the short fall must be on account of AE transactions only and not on pro rata basis. (b) Whether, on the facts and in the circumstances of the case and in law, the Tribunal is justified in deleting the addition of Rs 8,39,245/- as the adjustment is with +/- 5% as the ITAT has restricted the adjustment only on AE transactions which has resulted the adjustment w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absurdity wherein the total value of international transactions would be much less than the adjustment made to ALP. We find that the issue under consideration is squarely answered by the Hon'ble Bombay High Court in the case of CIT vs Tara Jewels Exports Private Limited in ITA No. 1814 of 2013 dated 5.10.2015, wherein the question raised before the Hon'ble High Court is as under:- "Whether in law and on the facts of the instant case, was the Tribunal justified in holding that while computing the ALP of international transactions the AO/TPO is precluded from taking into consideration transactions with Non Associate Enterprises, while arriving at the ALP using the Net Transactional Margin Method (TNMM) ; whereas Rule 10B(1)(e) mandates the consideration of profit margins with unrelated enterprises? " It was observed in the said order by the Hon'ble High Court as under:- "6. The question as proposed by the revenue does not seems to arise from the impugned order of the Tribunal nor is the method of determination of ALP on application of TNMM arriving at the margin of 4.79% is disputed before Tribunal or before us. We are unable to understand the grievance of the revenue as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are allowed for statistical purposes subject to the directions given hereinabove. 3.10. Respectfully following the same, the Ground Nos. 7 & 8 raised before us are allowed for statistical purposes subject to the directions given hereinabove and with regard to Grounds 1 to 6 raised before us , we refrain to give our opinion on the same and the same are left open. 4. The next issue to be decided in this appeal is as to whether the ld DRP was justified in upholding the action of the ld AO in allowing depreciation on printers at 15% as against 60% claimed by the assessee, in the facts and circumstances of the case. 4.1. The brief facts of this issue are that the assessee claimed depreciation on printers at the rate of 60% by stating that printers are part and parcel of the computers and are computer peripherals, which cannot work in isolation. The ld AO allowed depreciation at 15% on printers on the ground that the said assets were depreciated at 15% in the preceding year i.e Asst Year 2011-12. This action of the ld AO was upheld by the ld DRP. Aggrieved, the assessee is in appeal before us. 4.2. We have heard the rival submissions. We find that the ld AR placed on record the copy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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