Income Tax Appellate Tribunal - Bangalore
Toyota Kirloskar Auto Parts Private ... vs Assistant Commissioner Of Income Tax, ... on 6 February, 2023
IN THE INCOME TAX APPELLATE TRIBUNAL
"C'' BENCH: BANGALORE
BEFORE SMT. GEORGE GEORGE K, JUDICIAL MEMBER
AND
SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER
IT(TP)A No.861/Bang/2022
Assessment Year : 2018-19
M/s. Toyota Kirloskar Auto Parats (P) Ltd. The Asst. Commissioenr of
Plot No.21, Bidadi Industrial Area Income-tax LTU,
Ramanagar District Circle-2
Vs.
Bangalore 562 109 Bangalore
PAN NO : AABCT 5590 Q
APPELLANT RESPONDENT
Appellant by : Shri Ankur Pai, Advocate
Respondent by : Smt. S Praveena, CIT (D.R)
Date of Hearing : 07.12.2022
Date of Pronouncement : 06.02.2023
ORDER
PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER:
This appeal filed by the assessee is directed against Final Assessment order passed u/s 143(3) r.w.s 144C(13) r.w.s 144B of the Act by the AO dated 21.07.2022 with the following grounds of appeal:-
"I. Transfer Pricing The grounds mentioned hereinafter are without prejudice to one another.
1. The learned Assessing Officer ('AO') learned Transfer Pricing Officer ('TPO') and the Honourable Dispute Resolution Panel ('Hon'ble DRP') grossly erred in determining an adjustment of INR 85,30,90,000/- to the Arm's Length Price ('ALP') of the Appellant's international transactions IT(TP)A No.861/Bang/2022 Page 2 of 18 with its Associated Enterprises ('AEs') u/s 92CA of the Income-tax Act, 1961.
II. Grounds on rejection of the transfer pricing documentation, computation of Appellant's operating margin and use of various filters
2. The learned AO/ learned TPO/ Hon'ble DRP erred in rejecting the TP documentation maintained by the Appellant by invoking provisions of sub-section (3) of 92C of the Act.
3. The Learned AO/ Learned TPO/ Hon'ble DRP erred in rejecting comparability analysis undertaken in the TP documentation and in conducting a fresh comparability analysis by introducing various filters for the purpose of determining the Arm's Length Price ("ALP") of the international transaction.
4. The learned AO/ learned TPO/ Hon'ble DRP erred in treating foreign exchange as operating in nature.
5. The learned AD! learned TPO/ Hon'ble DRP erred in considering export incentives as non-operating in nature. Further, the Hon'ble DRP has not provided proper reasoning for rejection of Appellant's ground.
6. The learned AO/learned TPO erred in not appreciating the treatment of excise duty for computation of Appellant's operating margin.
7. The learned AO/ learned TPO/ Hon'ble DRP erred in selecting the companies only if the data pertaining to FY 2017-18 is available in the public databases, leading to a narrower comparable set.
8. The learned AD! learned TPO/ Hon'ble DRP erred in applying different financial year ending filter while selecting the comparable companies without considering the fact that the relevant data for the concerned financial year could be deduced from the corresponding financials, leading to a narrower comparable set.
9. The learned AO/ learned TPO/ Hon'ble DRP erred in rejecting comparable companies that fails the manufacturing income filter of 75 percent, leading to a narrower comparable set.
10. The learned AO/ learned TPO/ Hon'ble DRP erred in application of persistent loss filter, leading to a narrower comparable set.
11. The learned AO/ learned TPO/ Hon'ble DRP erred in adopting an erroneous approach in computing the related party transaction filter. III. Manufacturing segment
12. The learned AO/ learned TPO/ Hon'ble DRP erred in not adjudicating upon the reasons for rejection of comparable companies forming part of TP Documentation prepared by the Appellant.
13. Further, the learned AO/ learned TPO/ Hon'ble DRP erred in not considering the fact that following TP documentation companies were selected by the learned AO/ learned TPO, in Appellant's own case in previous assessment years:
1. Gabriel India Limited in AY 2014-15;
2. JMT Auto Limited in AY 2014-15 and AY 2016-17;
3. Munjal Showa Limited in AY 2014-15 and AY 2015-16;
4. Talbros Engineering Limited in AY 2014-15 and AY 2016-17;
5. Shivam Autotech Limited in AY 2015-16; and IT(TP)A No.861/Bang/2022 Page 3 of 18
6. GKN Driveline (India) Limited in AY 2016-17
14. The learned AO/ learned TPOL Hon'ble DRP erred in not rejecting the following companies from the list of comparable companies:
1. Spicer India Private Limited
2. Vanaz Engineers Limited
3. Emmbros Autocomp Limited
4. Pearlite Liners Private Limited
15. The learned AO/ learned TPO/ Hon'ble DPP erred in rejecting companies that ought to have been accepted as comparable companies on the grounds such as functional similarity, companies qualifying applied filters etc.:
1. Bharat Gears Limited
2. Gajra Gears Private Limited
3. Hindustan Hardy Limited
4. Packwell Gaskets Private Limited
5. Rane (Madras) Limited
6. Sar Auto Products Limited
7. Sibar Auto Parts Limited
16. The learned AO/ learned TPOL Hon'ble DRP erred in not considering that Hindustan Hardy Limited was selected by the learned TPO, in Appellant's own case, in the set of comparable companies for AY 2015-16 and AY 2016-17.
17 Further, learned AO/ learned TPO/ Hon'ble DRP erred in not considering the following companies in the final set of comparable companies which have been accepted by the Hon'ble DRP in Appellant's own case in previous assessment years:
1. Bharat Gears Limited in AY 2015-16;
2. Rare (Madras) Limited in AY 2015-16;
3. Packwell Gaskets Private Limited in AY 2016-17;
4. Sibar Auto Parts Limited in AY 2016-17.
Iv. Grounds on benchmarking of payment of royalty separately and incorrect application of residual PSM
18. The learned AO/learned TPO/ Hon'ble DRP erred in disregarding the Transactional Net Margin Method ('TNMM') analysis performed by the Appellant to justify the arm's .ngth nature of the payment of royalty transaction.
19. The AO/ learned TPO/ Hon'ble DRP erred in not understanding that the Appellant had adopted TNMM for benchmarking the royalty transaction in its TP Documentation of FY 2017-18 as the royalty paid is closely interlinked with the manufacturing operations carried out by the Appellant.
20. The learned AO/ learned TPO/ Hon'ble DRP grossly erred in their approach by not following the Hon'ble Tribunal's order in the Appellant's own case for previous years i.e. AY 2013-14, AY 2014-15, AY 2016-17 and AY 2017-18 wherein TNMM method for royalty transaction adopted by the Appellant was upheld.
21. The learned AD! learned TPO/ Hon'ble DRP erred in stating that royalty transaction is not linked to the manufacturing activities without IT(TP)A No.861/Bang/2022 Page 4 of 18 appreciating that the Appellant is a licensed manufacturer and it needs the licensed technology to manufacture its products. Therefore, the royalty transaction is closely linked to the manufacturing activity and hence cannot be evaluated separately.
22. The learned AO/ learned TPO/ Hon'ble DRP erred in disregarding the aggregation of transactions and stated that unrelated transactions cannot be clubbed and ALP can be determined only if such transactions were entered into a package deal or are so closely linked that one cannot stand without the other.
23. The learned AO/ learned TPO/ Hon'ble DRP erred in computing the percentages of purchase and sale to AE5, which has led to incorrect approach for aggregation of transaction.
24. The learned AO/ learned TPO/ Hon'ble DRP erred in adopting Profit Split Method ("PSM") for benchmarking the royalty transaction and erroneously concluded that Appellant and AE both make valuable contributions, the profits from commercialization of the IP should be shared by both. Further, the learned AO/ learned TPO erred in concluding that the useful economic life of bundle of technologies transferred to the Appellant has lapsed and royalty paid by the Appellant is for the technical upgrades.
25. The learned AO/ learned TPO/ Hon'ble DRP erred in considering Residual PSM and ignoring the fact that the Appellant does not make any unique contribution to the licensed technology. The Appellant merely uses the licensed technology to manufacture the products.
26. The learned AO/ learned TPO/ Hon'ble DRP has erred in not appreciating the fact that Appellant's Functions, Assets and Risk ('FAR') analysis only revolves around the manufacturing process without any contribution to ownership of unique intangibles, thus leading to incorrect application of PSM.
27. The learned AO/ learned TPO/ Hon'ble DRP erred in assigning arbitrary weights to the functions performed by the Appellant vis-à-vis the Associated Enterprises without carrying out a detailed FAR analysis. Further, the learned AO/ learned TPO/ Hon'ble DRP erred in applying an ad-hoc 50:50 profit split without giving any logical reasoning for arriving at this method.
28. The learned AO/ learned TPO/ Hon'ble DRP has also erred in determining the royalty rate at 0.335% on sales, without giving any logical basis for the same.
29. The learned AO/ learned TPO/ Hon'ble DRP erred in proposing an adjustment against royalty payment twice. The learned AO/ learned TPO/ Hon'ble DRP erred in not considering the fact that the royalty expenses have been considered as part of the operating cost base at an entity level for the purpose of adjusting the margins under the manufacturing segment using Transactional Net Margin Method ("TNMM") and considering royalty transaction under PSM analysis lead to double adjustment. Further, Hon'ble DRP erred in not considering their own directions passed in Appellant's case for AY 2017-18, considering the facts of the case have remained the same.
IT(TP)A No.861/Bang/2022 Page 5 of 18 V. Corporate tax
30. Interest under section 234B, 234C and 234D of the Act
(i) The learned AD erred in levying interest under section 234B, 234C and 234D of the Act at INR 15,41,36,466/-, INR 55,54,189/- and INR 5,03,061/- respectively in the final assessment order. In light of the contentions in the aforesaid grounds, the learned AD erred in levying interest under section 234B, 234C and 234D of the Act in relation to such adjustments.
(iii) Without prejudice to the above, the Appellant submits that interest under section 234B of the Act is consequential in nature. Accordingly, once the abovementioned adjustments are deleted, the interest under section 23413, 234C and 234D of the Act will get nullified.
31. Penalty proceedings under section 274 read with section 270A of the Act
(i) The learned AD erred in initiating penalty proceedings under Section 274 read with section 270A of the Act.
(ii) The learned AD failed to appreciate the fact that the Appellant has not furnished any inaccurate particulars of income. The AD failed to appreciate the fact that a mere difference of opinion between the Appellant and the AD would not amount to furnishing of any inaccurate particulars of income.
(iii) The learned AO failed to appreciate the fact that the additions made by him are on items, which are sub-judice, and hence, no penalty can be levied on such contentious adjustments.
The Appellant craves leave to add, alter, rescind and modify the grounds herein above or produce further documents, facts and evidence before or at the time of hearing of this appeal.
For the above and any other grounds which may be raised at the time of hearing, it is prayed that necessary relief may be provided."
2. The brief facts of the case are that the assessee company filed its return of income for the assessment year 2018-19 on 29/11/2018 declaring income of Rs.158,90,42,060/-. Later, on 31/03/2019, the return was revised declaring same income. The case was selected for scrutiny and statutory notices were issued to the assessee on examining of the documents, it was observed that the assessee had international transactions with its AE's exceeding Rs.15 crores, therefore, the case was referred to the TPO after obtaining approval from the competent authority.
IT(TP)A No.861/Bang/2022 Page 6 of 18
3. The assessee is engaged in manufacturing and sale of automotive front axles, rear axle, propeller shafts, transmission units and engines. The assessee is a vendor to Toyoto Kirloskar Motors Limited.
4. After reference received, the assessee was asked to file documents as per sec. 92D of the Act. The assessee filed same and it was noticed that for determination of ALP, the tax payer had entered into the following international transactions:-
IT(TP)A No.861/Bang/2022 Page 7 of 18 IT(TP)A No.861/Bang/2022 Page 8 of 18
5. The TPO further observed from the financial statements that there is OP/OR of 8.58%. The TPO after examining of the tax payer financials he calculated OP/OR at 6.91%. The TPO applied search process to bench mark entity level transactions. The TP documents filed by the assessee was rejected and he applied certain filters for the manufacturing segments. In the final set of comparables, the TPO selected 14 companies and calculated median @ 10.16% for determining of ALP. Accordingly for the manufacturing segment, the TPO proposed to make adjustments for Rs.48,06,30,000/- calculated as under:-
IT(TP)A No.861/Bang/2022 Page 9 of 18
6. The TPO further observed that the assessee company has paid royalty for Rs.580.25 million. Therefore, the TPO made separate adjustment and applied the PSM and calculated EBITR/OR/@ 10.83%. Accordingly, the TPO calculated the adjustment for royalty payment as under and passed the TP order on 31/07/2021.
7. After receipt of the TPO's order, the AO passed order u/s 144C on 15/09/2021 after considering the proposed addition as IT(TP)A No.861/Bang/2022 Page 10 of 18 per the TPO order of Rs.10212.30,000/-, assessed total income of Rs.261,02,72,060/-. The assessee filed objections before the DRP and DRP gave directions on 23/06/2022 and no relief was granted.
8. Thereafter the AO passed final assessment order and assessed the total income as per draft assessment order, the assessee filed rectification application dated 11/10/2021 by stating that the royalty adjustments have been considered twice and there is incorrect computation of royalty adjustments before the TPO u/s 154 of the Act.. The TPO passed order u/s 154 on 29/04/2022, DIN & Letter No. ITBA/COM/F/17/2022- 23/1042909477(1) in the case of royalty adjustment, it was reduced to Rs.53,06,90,000/-, accordingly the total adjustments were suggested for Rs. 1,01,13,20,000 ( Manufacturing Segment Rs. 48,06,30,000 + MSS Segment for Royalty Rs. 53,06,90,000). Further the DRP direction dated 15.07.2022 the T.P. adjustment was reduced to Rs. 85,30,90,000/- ( Manufacturing Segment Rs. 32,24,00,000 + MSS Segment for Royalty Rs. 53,06,90,000).
9. Aggrieved from the final assessment order dated 21.07.2022, DIN No. ITBA/AST/S/143/(3)/2022-23/1043968195(1), the assessee filed appeal before the Income Tax Appellate Tribunal.
10. The ld.AR submitted that the assessee filed rectification application before the DRP on 16/08/2022 which is placed at paper book page No. 560 to 562 and submitted that the royalty adjustment has been made twice and it was further submitted that IT(TP)A No.861/Bang/2022 Page 11 of 18 in assessee's own case, the facts remains similar to assessment year 2016-17 and the DRP panel is upheld royalty expenses have already been considered as part of operating expenses at entity level under the manufacturing segment using TNMM subjecting the royalty transactions against to PSMN analysis would lead twice adjustment. This rectification accepted by the DRP order dated 23.09.2022 placed at P.B. page No. 563 to 573 and noted as under:-
"11.4 The contentions of the assessee are that the royalty expense of Rs 580,254,891 already forms part of the operating cost base of the company at entity level. The same operating cost base has been considered by the learned TPO in proposing an adjustment to the entity level margins of the Assessee. Therefore, the TPO has already performed an adjustment to the payment of royalty transaction while proposing an adjustment at the entity level. Hence, a separate adjustment for royalty using PSM is not warranted.
11.5 Having considered the submission of the assessee, we note that as per arguments as of the assessee the royalty expenses are included in operating cost of the company at entity level for benchmarking the international transactions under TNMM. Apart from this, royalty is benchmarked separately by the TPO. In this respect, we consider it appropriate to direct the AO/TPO to verify whether royalty expenses have been included while benchmarking at the entity level. In case it is included, the same should be removed for benchmarking at entity level as the royalty expenses are separately benchmarked. Directed Accordingly."
10.1. The TPO after receipt of the rectification order from the DRP, there was no adjustment required under the manufacturing of diesel engine and transmission because the royalty expenses was treated as non-operating expenses accordingly the taxpayers PLI 10.83% was more than the 35th percentile 9.41% as computed by the TPO and the royalty adjustment was upheld. Accordingly IT(TP)A No.861/Bang/2022 Page 12 of 18 adjustment was of Rs.53,06,90,000/- towards royalty was confirmed vide his order dated 21.10.2022, DIN No. ITBA/COM/F/17/2022-23/1046512054(1) .
10.2. Accordingly, he submitted that the ground No.12 to 17 and 29 become infructuous.
10.3. He further submitted in respect of ground Nos.18 to 28, that the issue is similar in assessee's own in ITA No.188/Bang/2022 for the assessment year 2017-18 vide order dated 02/06/2022, which is placed on record. The ld. AR has also filed written synopsis which is placed on record
11. Ground No.2 to 11 is academic in nature and does not require any adjudication.
12. On the other hand, the ld. DR relied on the order of the lower authorities and he submitted that the lower authorities have done good reasoned order and does not require any interference, therefore adjustment under the royalty calculated by the lower authorities should be upheld.
13. After hearing both the parties and perusing the entire materials on record and examining the order of the lower authorities, we observe that the ground No.1 was not pressed by the AR of the assessee, therefore, it is dismissed as not pressed.
IT(TP)A No.861/Bang/2022 Page 13 of 18
14. In respect of ground nos.2 to 11, after considering the submissions of the ld.AR that after rectification order passed by the revenue authorities as observed from the their orders which are placed on the paper book , it becomes academic in nature and does not require any adjudication.
15. In ground No.12 to 17 and 29, we found substance in the submissions of ld.AR and after perusal of the rectification orders passed by the revenue authorities, the adjustment made under the manufacturing segment is Rs.48,06,30,000/- becomes nil, therefore this ground taken by the assessee becomes infructuous.
16. Ground No.18 to 28 is towards royalty adjustment 16.1. On perusal of the order of the revenue authorities, we observe that the royalty adjustment has been made separately by applying profit level method (PSM) whereas the assessee contested that the TNMM should be applied by the revenue authorities. On going through the facts for the current year's and the preceding years' the facts are remain the same. On going through the order of the assessee for the AY 2017-18 the similar issue has been decided by the coordinate bench of the Tribunal in assessee's own case cited supra which is reproduced here under:-
"4. The facts in the present asst. year 2017-18 are identical with issue covered by the decision of coordinate bench in the assessee's own case in IT(TP)A No.1915/Bang/2017 & 337/Bang/2018 vide order dated 18/03/2020 for the assessment year 2013-14 and IT(TP)A No. 1646/Bang/2017 for assessment year : 2013-14 and in IT(TP)A No. 2586/Bang/2019 for the assessment year : 2015-16.
IT(TP)A No.861/Bang/2022 Page 14 of 18
5. In the aforesaid order, the Tribunal held as follows :-
We have considered the rival submissions. We are of the view that the issue with regard to Most Appropriate Method in the case of assessee had already been settled by the Tribunal. The TPO as well as the DRP have not followed the aforesaid decision of the Tribunal on the ground that economic life of the technology had an impact on the MAM and that technology in question was to be used by start-ups and since the assessee was using the technology for a fairly long period of more than 5 years, it would not be proper to adopt the TNMM as the MAM, as the economic life of the technology would no longer exist. In our view, there is no basis for .be TPO as well as the DRP to come to a conclusion that technology in question was to be used by a start-up. There is no basis for the TPO and DRP to come to a conclusion that the Assessee is a start up in manufacture of various parts for automobiles. The technology in question was that of TMC Japan. The technology is being used by the Assessee even today. There is no basis for the TPO/DRP's conclusion that the useful economic life of the technology would be only 5 years. In any event passage of time cannot be the basis to discard TNMM which is already held by the Tribunal and upheld by the Hon'ble High Court as no longer the MAM because the conditions necessary for PSM as MAM are not met in the case of the Assessee. Even going by Rule 10B(1)(d), there should be contribution by each of the parties to a transaction for earning profits from sale of goods or provision of services. Then the contribution of each of the parties is identified and the profit is split between those parties. In the case of the Assessee the technology is given by TMC, Japan for which royalty is paid. The use of the technology in manufacturing and the sale of the product so manufactured contribute to the profit of the Assessee and TMC, Japan has nothing to do with that. There is therefore absence the first condition for application of PSM as MAM. As submitted by the Assessee PSM is used as MAM only in a case involving transfer of unique intangible or in multiple inter-related international transactions which cannot be valued separately for determining the ALP. The OECD guidelines cited on behalf of the assessee clearly supports the aforesaid approach and the OECD guidelines in this regard reads as follows:-
"Further reliance is also placed on OECD Guidelines, which clearly lay down the situations in which the PSM is selected as an appropriate method for benchmarking. The relevant extract from the OECD Guidelines (para 2.109) is as below:
"A transactional profit split method may also be found to be the most appropriate method in cases where both parties to a transaction make unique and valuable contributions (e.g. contribute unique intangibles) to the transaction, because in such a case independent parties might wish to share the profits of the transaction in proportion to their respective contributions and a two-sided method might be more appropriate in these circumstances than a one-sided method. In addition, in the presence of unique and valuable contributions, reliable comparables information might be insufficient to apply IT(TP)A No.861/Bang/2022 Page 15 of 18 another method. On the other hand, a transactional profit split method would ordinarily not be used in cases where one party to the transaction performs only simple functions and does not make any significant unique contribution (e.g. contract manufacturing or contract service activities in relevant circumstances), as in such cases a transactional profit split method typically would not be appropriate in view of the functional analysis of that party".
16.The revised guidance (June 2018) on the application of transactional PSM, provided by the OECD state the importance of delineating the transactions in determining whether the PSM is applicable or not. The relevant extract from the OECD Guidelines is provided below:
"2.125. The accurate delineation of the actual transaction will be important in determining whether a transactional profit split is potentially applicable. This process should have regard to the commercial and financial relations between the associated enterprises, including an analysis of what each party to the transaction does, and the context in which the controlled transactions take place. That is, the accurate delineation of a transaction requires a two-sided analysis (or a multi-sided analysis of the contributions of more than two associated enterprises, where necessary) irrespective of which transfer pricing method is ultimately found to be the most appropriate.
2.126. The existence of unique and valuable contributions by each party to the controlled transaction is perhaps the clearest indicator that a transactional profit split may be appropriate. The context of the transaction, including the industry in which it occurs and the factors affecting business performance in that sector can be particularly relevant to evaluating the contributions of the parties and whether such contributions ale unique and valuable. Depending on the facts of the case, other indicators that the transactional profit split may be the most appropriate method could include a high level of integration in the business operations to which the transactions relate and /or the shared assumption of economically significant risks (or the separate assumption of closely related economically significant risks) by the parties to the transactions. It is important to note that the indicators are not mutually exclusive and on the contrary may often be found together in a single case.
2.127. At the other end of the, spectrum, where the accurate delineation of the transaction determines that one party to the transaction performs only simple functions, does not assume economically significant risks in relation to the transaction and does not otherwise make any contribution which is unique and valuable "2.147. Under the transactional profit split method, the relevant profits are to be split between the associated enterprises on an economically valid basis that approximates the divisi6n of profits that would have been anticipated and reflected in an agreement made at arm's length. In general, the determination of the relevant profits to be split and of the profit splitting factors should:
Be consistent with the functional analysis of the controlled transaction under review, and in particular reflect the assumption of the economically significant risks by the parties, and IT(TP)A No.861/Bang/2022 Page 16 of 18 Be capable of being measured in a reliable manner."
17.It is clear from the above OECD guidelines that in 'order to determine the profits to be split, the crux is to understand the functional profile of the entities under consideration. Although the comparability analysis is at the "heart of the application of the arm's length principle", likewise, a functional analysis has always been a cornerstone of the comparability analysis. In the present case the Assessee leverages on the use of technology from the AE and does not contribute any unique intangibles to the transaction. It may be true that the Assessee aggregated payment of royalty with the transaction of manufacturing as it was closely linked and adopted TNMM but that does not mean that the transactions are so interrelated that they cannot be evaluated separately for applying PSM. Further, the Assessee does not make any unique contribution to the transaction, hence PSM in this case cannot be applied.
18.Therefore, we are of the view that TNMM is the Most Appropriate Method in the case of assessee. The decision of the Tribunal in the earlier AY 2008-09 has also been upheld by the Hon'ble High Court of Karnataka in ITA No.104/2015, judgment dated 16.7.2018, which was an appeal of the revenue against the order of Tribunal for AY 2008-09. The Tribunal has upheld TNMM as MAM from AY 2007-08 to 2011-12. In those AYs the dispute was whether TNMM or CUP was the MAM. It is for the first time in AY 2013-14 that the revenue has sought to apply PSM as MAM. In the given facts and circumstances, we are of the view that TNM Method is the Most Appropriate Method and the AO is directed to apply the said method in determining the ALP, after affording opportunity of being heard to the assessee. The grounds of appeal of the assessee are treated as allowed.
19.The facts in AY 2014-15 are identical and the reasoning given in AY 2013- 14 will equally apply to the AY 2014-15 also and the TPO is directed to compute the ALP for AY 2014-15 by applying TNMM as the MAM , after affording due opportunity to the assessee."
6.Respectfully following the aforesaid decision, we set aside the question of determination of ALP to the TPO afresh applying TNMM as the most appropriate method as was done in Assessment Years 2013-14 and 2014-15 & 2014-15 in the order referred to above. The other issue with regard to determination of ALP under the PSM is academic and does not require adjudication."
16.2. Respectfully following the above decision, we direct the AO/TPO/DRP for applying TNMM as most appropriate method as decided in the previous assessment year cited supra. Needless to say that the assessee shall be given reasonable opportunity of IT(TP)A No.861/Bang/2022 Page 17 of 18 being heard and assessee is directed not to seek unnecessary adjournment for early disposal of the case.
17. The ground No. 30 & 31 are consequential in nature.
18. In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the court on 6th February, 2023.
Sd/- Sd/-
(George George K) (Laxmi Prasad Sahu)
Judicial Member Accountant Member
Bangalore,
Dated 6th February, 2023
Vms
Copy to:
1. The Applicant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The DR, ITAT, Bangalore.
6. Guard file
By order
Asst. Registrar, ITAT, Bangalore.
IT(TP)A No.861/Bang/2022
Page 18 of 18
1. Date of Dictation .............................................
2. Date on which the typed draft is placed before the dictating Member .........................
3. Date on which the approved draft comes to Sr. P. S ...................................
4. Date on which the fair order is placed before the dictating Member ....................
5. Date on which the fair order comes back to the Sr. P.S. .......................
6. Date of uploading the order on website...................................
7. If not uploaded, furnish the reason for doing so ................................
8. Date on which the file goes to the Bench Clerk .......................
9. Date on which order goes for Xerox & endorsement..........................................
10. Date on which the file goes to the Head Clerk .........................
11. The date on which the file goes to the Assistant Registrar for signature on the order .....................................
12. The date on which the file goes to dispatch section for dispatch of the Tribunal Order ...............................
13. Date of Despatch of Order. .....................................................
14. Dictation note enclosed..........................................