Income Tax Appellate Tribunal - Mumbai
Radiant Plastic Industries P.Ltd, ... vs Dcit Cir 3(3)(1), Mumbai on 16 November, 2016
आयकर अपीलीय अिधकरण, अिधकरण, मुबं ई " के " खंडपीठ Income-tax Appellate Tribunal -"K"Bench Mumbai ,,लेखा सद य एवं, शि जीत डे, याियक सद य सव ी राजे Before S/Shri Rajendra,Accountant Member and Saktijit Dey,Judicial Member आयकर अपील सं/ ITA No.1265/Mum/2015 : िनधा रण वष /Assessment Year-2010-11 M/s. Radiant Plastic Industries Pvt. Ltd. DCIT-3(3)(1) 722, Maker Chamber-V, Nariman Point Aayakar Bhavan Vs. Mumbai (W)-400 021. Mumbai.
PAN:AAACR 3302 F
(Appellant) (Respondent)
Revenue by: ShriN.K. Chand -CIT
Assessee by: None
सुनवाई क तारीख / Date of Hearing: 04.10.2016
घोषणा क तारीख / Date of Pronouncement: 16.11.2016 आयकर अिधिनयम,1961 की धारा 254(1)के अ ग त आदे श Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद , राजे के अनुसार/ PER Rajendra A.M.-
Challenging the assessment order dated.30.01.2015 of the Assessing Officer (A.O.), passed u/s. 143(3) r.w.s. 144C (13) the assessee has filed the present appeal.
2.Assessee-company, engaged in the business of trading in various items ,filed its return of income on 4.9.2010, declaring income of Rs.62.90 lakhs. The AO, in pursuance of the Dispute Resolution Panel (DRP) determined the income of the assessee at Rs.2.26 crores.
3.First effective Ground of appeal (GOA-1-5) is about upward adjustment of Rs.1.63 crores in respect of the International Transactions (IT.s) pertaining to sale of goods and services. During the assessment proceedings, the AO found that the assessee had entered into IT.s with its Associate Enterprises (AE.s)of Rs.17.18 crores. He made a reference to the Transfer Pricing Officer (TPO).During the Transfer Pricing (TP) proceedings,he found that the assessee had adopted TNMM as most appropriate method for determination of Arms-Length Price(ALP) of the IT.s.The assessee furnished data of 16 comparables in that regard . The TPO rejected 12 comparables selected by the assessee and selected the final set of comparables as under:-
i. ABC Tube Inds. Ltd. 14.21%
ii. ACL Components Ltd. 11.61%
iii. Cuprum Bagrodia Ltd. 12.26%
iv. Mitutoyo South Asia Pvt. Ltd. 17.16%
1265/M/15-Radiant Plastic
Average 13.8%
3.1.He re-computed the PLI of the assessee at 2.02% considering the cost of goods sold as an expense and excluding other income not operating in nature. He observed that average PLI of the comparables worked out at 13.8% as against the PLI of the assessee at 2.02%. As a result he made an adjustment of Rs.1.98crores. Accordingly the AO proposed to add the said amount in the draft assessment order. The assessee filed its objection before the DRP and submitted that the other income i.e. sale of DEPB (Rs.16.13 lakhs), duty drawback (Rs.8.23 lakhs) and interest from customers (Rs.19.27lakhs) ought to be treated as operating in nature while computing PLI, that the TPO had used different yardstick for computing PLI in the case of comparables, that in the financial statements of the comparables other income has been considered as part of operating income and hence operating profit. It referred to financials of ACC Tube Industries, ACL Components Ltd. and Cuprum Bagrodia Ltd., that the TPO had erred in omitting the other income from operating income of the assessee, that it did not consider interest recovered from customers that decreased the operating profit.After considering the submission of the assessee and the TPO the DRP directed the TPO to adapt a consistent stand while including/excluding items of income,that all items of income considered as operating in nature had to be considered as part of the operating income in case of comparables.Accordingly the TPO was directed to re-compute the ALP.
4.During the course of hearing before us,no one appeared,as stated earlier.The Departmental Representative (DR) left the issue to the discretion of the Bench. We have heard submissions of ld. DR and perused the material before us.We find that the DRP had directed the TPO to adapt a consistent stand while including/excluding items of income.In our opinion,the order of the AO passed in pursuance of the DRP directions does not suffer from any infirmity.So,confirming the same we decide the effective ground of appeal against the assessee.
As a result, appeal filed by the assessee stands dismissed.
फलतः िनधा रती ारा दािखल क अपील नामंजूर क जाती है.
Order pronounced in the open court on 16th November, 2016. आदेश क घोषणा खुले यायालय म दनांक 16 नवंबर, 2016 को क गई ।
(शि जीत डे / Saktijit Dey) (राजे / Rajendra)
Sd/- Sd/-
याियक सद
य / JUDICIAL MEMBER लेखा सद
य / ACCOUNTANT MEMBER
मुंबई Mumbai; दनांकDated : 16 . 11.2016.
Jv.Sr.PS.
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1265/M/15-Radiant Plastic
आदेश क ितिलिप अ ेिषत/Copy of the Order forwarded to :
1.Appellant /अपीलाथ 2. Respondent / यथ
3.The concerned CIT(A)/संब! अपीलीय आयकर आयु$, 4.The concerned CIT /संब! आयकर आयु$
5.DR "A " Bench, ITAT, Mumbai /िवभागीय ितिनिध, खंडपीठ,आ.अ. याया.मुंबई
6.Guard File/गाड फाईल स यािपत ित //True Copy// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst. Registrar आयकर अपीलीय अिधकरण, मुंबई /ITAT, Mumbai.
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