Income Tax Appellate Tribunal - Delhi
Bucher Hydraulics Pvt. Ltd., Gurgaon vs Ito, Ward- 5(2), New Delhi on 13 April, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES: 'I-1', NEW DELHI
BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER
AND SMT. BEENA A PILLAI, JUDICIAL MEMBER
ITA No. 7803/Del/2017
A.Y. 2013-14
Butcher Hydraulics Pvt. Ltd. ITO, Ward 5(2)
Plot no.6, Sector 5 vs. New Delhi
IMT, Manesar
Gurgaon 122 050
PAN: AAECS 5991 H
(Appellant) (Respondent)
Appellant by Sh. Pradeep Dinodia, C.A. and
Sh. RK Kapoor
Respondent by Sh. Sanjay I Bara, CIT, DR
Date of Hearing 28.03.2018
Date of Pronouncement 13.04.2018
ORDER
PER BEENA A PILLAI, JUDICIAL MEMBER
Present appeal has been filed by assessee against final assessment order dated 30/10/2007 passed by Ld. ITO, Ward 5 (2), New Delhi under section 143 (3) read with 144C (13) of Income Tax Act, 1961 (the Act) for assessment year 2013-14 on following grounds of appeal:
"1. The Ld. Transfer Pricing Officer ('TPO')/Hon'ble Dispute Resolution Panel ('DRP') and consequently Ld. Assessing Officer ('AO') ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi have erred in law and on facts, in making a transfer pricing ('TP') adjustment of Rs.l,42,38,110/- on account of Arm's Length Price u/s 92CA of the Income Tax Act, 1961 ('the Act'), wholly on illegal, erroneous and untenable grounds.
2. The order of Assessment is bad in law and on the facts and under the circumstances of the case on account of Arm's Length Price u/s 92CA of the Act.
Rejection of Comparable by Ld. TPO:
3. The Ld. TPO/Hon'ble DRP and consequently Ld. AO have grossly erred in law and on facts and circumstances of the appellant's case in rejecting Continental Valves as a comparable on account of failing low turnover filter of Rs. 5 Crore applied by the Ld. TPO (i.e. Rs. 3.71 Crore) as against the appellant's filter of Rs. 1 Crore which is against the tenet of comparability under Rule 1OB(2) of the Income Tax Rules, 1962 ('the Rules') and in spite of it being accepted by the Hon'ble DRP in AY 2012-13.
Selection of New Comparables by Ld TPO:
4. The Ld. TPO/Hon'ble DRP and consequently Ld. AO have grossly erred in law and on facts and circumstances of the appellant's case in selecting new comparables which have high turnover and different functional profiles than the appellant and do not satisfy the provisions of Rule 10B(2) and their selection is therefore bad in law and on facts.
Cherry picking of comparables:
5. Without prejudice to Ground No. 4, the Ld. TPO/Hon'ble DRP and consequently Ld. AO have grossly erred in law and on facts and circumstances of the appellant's case in cherry picking new comparable viz. Dynamatic Technologies Limited ignoring the 2 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi appellant's objections that the company does not meet the comparability criteria as prescribed under Rule 10B(2) viz. R&D activities, high turnover, economies of scale etc. and ignoring that it has been consistently rejected by the appellant on Turnover Filter in AY 2011-12 and AY 2012-13, which has been accepted by the Ld. TPO. Thus, the Ld. TPO's approach was selective and inconsistent which is bad in law and on facts of the case.
6. Without prejudice to Ground No.4, the Ld. TPO/Hon'ble DRP and consequently Ld. AO have grossly erred in law and on facts and circumstances of the appellant's case in cherry picking new comparable "WPIL Limited" ignoring the appellant's objections that the company does not meet the comparability criteria as prescribed under Rule 10B(2) viz. R&D activities, high turnover, economies of scale etc. and ignoring that it has been rejected by the Ld. TPO himself on Turnover Filter in AY 2011-12. Thus, the Ld. TPO's approach was selective and inconsistent which is bad in law and on facts of the case.
7. Without prejudice to Ground No.4, the Ld. TPO/Hon'ble DRP and consequently Ld. AO have grossly erred in law and on facts and circumstances of the appellant's case in cherry picking new comparable "Yuken India Limited" ignoring the appellant's objections that the company does not meet the comparability criteria as prescribed under Rule 10.8(2) viz. R&D activities, high turnover, economies of scale etc. 3 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi PLI calculation not provided to appellant:
8. The Ld. TPO/Hon'ble DRP and consequently Ld. AO have grossly erred in law and on facts and circumstances of the appellant's case in neither giving the appellant complete details of the PLI recalculated by the Ld. TPO of all the companies taken in final set of comparables which is against the principle of natural justice nor considering the detailed calculation of the PLI submitted by the appellant which is bad in the facts and circumstances of the appellant's case.
Incorrect calculation of Operating Cost and Operating Revenue of the appellant:
9. The Ld. TPO/Hon'ble DRP and consequently Ld. AO have grossly erred in law and on facts and circumstances of the appellant's case in calculating transfer pricing adjustment by comparing Arm's Length Operating Cost with the Total expenses of Rs.20,56,35,378 instead of Operating Cost of the appellant of Rs. 20,48,90,405/-.
10. The Ld. TPO/Hon'ble DRP and consequently Ld. AO have grossly erred in law and on facts and circumstances of the appellant's case in calculating transfer pricing adjustment by considering Total Revenue of Rs. 20,82,34,754/- instead of Operating Revenue of Rs. 207,765,823/-.
The Ld. TPO/Hon'ble DRP and consequently Ld. AO have grossly erred in law and on facts and circumstances of the appellant's case in not limiting the transfer pricing adjustments in the proportion of the 4 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi value of International Transactions forming part of cost base as it bears to the total Operating Cost of the appellant. Others:
12. That the interest charged u/s 234B and 234C of the Act is wholly illegal and untenable grounds and is prayed not to be upheld.
13. That the penalty proceedings initiated u/s Sec 271(1)(c) are on wholly illegal and untenable grounds since there was no concealment of any income nor submission of inaccurate particulars of income, nor any default according to law by the appellant.
That each ground of appeal is independent and without prejudice to other grounds of appeal raised herein."
2. Brief facts of the case are as under:
Assessee filed its return of income declaring 'nil' income on 30/11/2013. The case was selected for scrutiny and statutory notices were issued to assessee in response to which Representatives of assessee appeared before Ld. AO and filed necessary details as called for.
2.1. Ld.AO observed that assessee carries on with business of designing, manufacturing of custom and application-specific hydraulic driver and control system for mobile and industrial hydraulic applications. From audited accounts and Form 3 CEB, Ld.AO, observed that assessee undertook international transactions with its Associated Enterprises (AE). Accordingly case was referred to Ld.TPO. Ld.TPO called for necessary details in respect of international transactions which are as under:5
ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi Nature of transactions Amount-(Rs.) Purchase of raw materials, 10,33,78,244 components and spares Sale of finished goods 1,03,40,906 Purchase of capital goods 73,550 License fees for trade mark 24,60,479 Service provided - commercial 1,74,025 services Management services 20,54,450 Software maintenance services 2,23,345 Issue of equity shares (share 10,00,00,000 application money received) Reimbursement of exhibition 9,42,979 expenditure (receivable) Reimbursement of other 1,98,390 expenditure (receivable) 2.2. Ld.TPO observed that assessee voluntarily made adjustment of Rs.56,10,221/- to actual price of international transaction.
Assessee in TP report used TNMM as most appropriate method for computing ALP of international transactions by using OP/Net sales as PLI and margin was computed at 3.83%.
2.3. There were 4 comparables selected by assessee having average margin of 5.09%. Assessee therefore concluded international transactions undertaken with AE to be at arm's 6 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi length and after considering voluntary adjustment of Rs.56,10,221/- value of international transaction was computed at Rs.10,25,79,847/-.
Out of comparables selected by assessee 2 were accepted by Ld. TPO and 2 were rejected for reasons as under:
Sl.No. Company Name Remarks
1. Bemco Hydraulic Accepted
2. Cont. Valves Different functional profile.
Rejected.
3. Hawa Engineers Different functional profile.
Rejected.
4. Roto Pumps Accepted
2.4. Ld. TPO conducted fresh search and certain comparables
were added to final list, having average margin at 10.53% as
under:
Sl. Company Name OP/OI
No.
1. Roto Pumps 14.48
2. Bemco Hydraulic 9.49
3. Yuken India Ltd. 4.58
4. W P I L Ltd. 13.24
5. Dynamatic Technologies Ltd. 10.87
Avg. 10.53%
2.5. On the basis of the above comparables finalised by Ld.TPO, adjustment proposed was calculated as under:
7ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi Operational income Rs. 208,234,754 Arm's length price 10.53 Arm's length price at a margin of Rs. 186,307,634 89.47% Operational cost Rs. 207,549,444 Proposed adjustment u/s 92CA Rs. 21,241,810
3. Aggrieved by adjustments so proposed by Ld. TPO, assessee raised objections before DRP as under:
· considering erroneous operational cost of assessee as computed in the show cause notice;
· erroneously rejecting 2 comparables namely Hawa Engineers Ltd., and Continental Valves Ltd from the list of comparables; · objection against cherry picking of companies as comparables; · computation of incorrect PLI's by using OP/net sales in the case of Continental Valves Ltd;
· ignoring the voluntary transfer pricing adjustment offered by assessee and the value of international transaction. 3.1. DRP, though upheld adjustment proposed by Ld. TPO, but directed to treat foreign exchange gain/loss as operating item and provision of bad debts and bank charges/fixed interest as non-
operating items for computing PLI of assessee as well as of comparables.
3.2. Ld.AO while giving effect to directions of DRP, was unable to determine whether adjustment granted by DRP has been provided 8 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi or not since PLI computation in respect of comparables were not provided to assessee.
4. Aggrieved by the final assessment order, assessee is in appeal before us now.
4.1. Ground No. 1 and 2 raised by assessee are general in nature and therefore do not require any adjudication.
5. Ground No. 3 is in respect of erroneous rejection of the comparable Continental Valves Ltd., on account of failing low turnover filter of Rs. 5 crore applied by Ld. TPO. 5.1. Ld.AR submitted that this comparable has been excluded by the authorities below, due to disqualifying turnover filter being less than Rs. 5 crore vis-a-vis turnover filter applied by assessee being, less than Rs.1 crore.
5.2. Ld.AR placed reliance upon functional profile of this company submitted along with TP study report, wherein this company has been categorised to be engaged in manufacturing of control valves in Wide range of models, sizes, materials and pressure classes and has also developed special-purpose valves to meet requirements of its esteemed customers. Ld.AR also submitted that for assessment year 2011-12 this comparable has been accepted by Ld.TPO himself, and for assessment year 2012-13 though the said comparable was rejected by Ld. TPO, DRP directed to include this comparable in the list for the purpose of determining ALP of international transactions. Ld.AR thus submitted that rule of consistency may be adopted even for this year and this comparable may be retained in the list.
9ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi Ld. CIT DR placed reliance upon order of Ld. TPO. 5.3. We have perused the submissions advanced by both the sides in the light of records placed before us.
5.4. It has been submitted before us by Ld.AR that turnover of assessee being Rs.20.7 crores, threshold of turnover filter of Rs.5 crore is on higher side, and is not an appropriate filter, since various Coordinate Benches of this Tribunal has applied turnover filter of 1/10 to 10 times of both sides of assessee's turnover as well as comparable, to determine the comparability by applying this filter. Further on the functional comparability of assessee with this comparable, it is observed that this company is engaged in manufacture of control valves with a wide range of models, sizes, materials and pressure classes and has also developed special- purpose valves to meet requirements of its esteemed customers. On verification of profit and loss account of this comparable it is observed that purchase of raw materials constitute materials consumed in production process and not for trading process which establishes this comparable to be engaged in carrying out manufacturing activity only. Further from TPO order passed by Ld.TPO placed at page 258 for assessment year 2011-12, as well as DRP for assessment year 2012-13 it is observed that this comparable has been accepted during these assessment years by observing as under:
"Continental valves Ltd was accepted as a suitable comparable in assessment year 2011-12 by the TPO. The TPO has not specified any change in circumstances on the basis of which this comparables 10 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi should be rejected as a suitable comparable in the year under consideration. Further companies for performing similar functions that is manufacturing valves has been accepted as valid comparable by the TPO. The TPO is therefore directed to treat this company as a suitable comparable during the year under consideration."
5.5. Further on perusal of the order by Ld.TPO for the year under consideration it is observed that he has nowhere disputed functional dissimilarity of this comparable with that of assessee. Even for the year under consideration this company is carrying on with similar manufacturing activity.
5.6. We therefore do not find any reason to reject this comparable from the final list more so when it has already been accepted by the authorities below in the immediately preceding assessment years which has not been disputed by the revenue authorities before this Tribunal.
Accordingly we direct Ld.TPO to consider this comparable in the final list.
Accordingly this ground raised by the assessee stands allowed.
6. Ground No. 4-7 These grounds raised by assessee is against incorrect selection of new comparables with a different functional profile. Ld.Counsel submits that Ld.TPO had selected the following 3 comparables:
· Yuken India Ltd · WPIL Ltd., · Dynamatic Technologies Ltd.11
ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi 6.1. Yuken India Ltd At the outset Ld.AR do not wish to argue comparability analysis of assessee with Yuken India Ltd.
It is observed from TP order that this company is engaged in manufacture of oil hydraulic equipment and the product range of this company includes power units- Parison controller, cylinders and Piston accumulators. Thus broadly it is into manufacturing activity and with TNMM as MAM to determine ALP, broad functional dissimilarities get automatically adjusted. Accordingly this comparable is directed to be included in final list of comparables. Appropriate working capital adjustment may be granted to assessee.
6.2. WIPL Ltd It has been submitted by Ld.AR that this company is a listed company with various stock exchanges, including BSE. It is submitted that this company has huge turnover of Rs.286.68 crore during the year under consideration. Ld.AR submits that this company carries out its own R&D for development of new products. It has been argued by Ld.AR that since this company is having huge turnover, i.e. almost 100 times that of assessee, cannot be compared with that of assessee.
On the contrary Ld. CIT DR insisted on retaining this comparable by placing reliance upon the observations recorded by Ld. TPO. Ld. CIT DR submitted that this company is engaged in manufacturing of vertical pumps, horizontal pumps, grey iron, castings and sluice 12 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi valves. He submitted that in the Transfer Pricing report submitted by assessee only one page regarding financial statement of this company has been placed. He referred to page 176 wherein, Notes Forming Part of the Financial statement is placed in respect of this comparable. He suggested that this company may be considered as it is also involved in manufacturing activity. 6.3. We have perused the submissions advanced by both the sides in the light of the records placed before us.
6.4. On perusal of financial extracts placed in paper book at page 176, we do agree with what has been stated by Ld. CIT DR. It is not possible to gather what has been submitted by Ld.AR in respect of this comparable in so far as the financial/segmental information is concerned. Ld.TPO in his order categorised this company to be engaged in manufacturing activity. Merely because this company is having a huge turnover and is submitted to be having its own R& D wing, cannot make it functionally dissimilar, more so when TNMM is used as the most appropriate method. This was what Ld.AR submitted while arguing comparability in case of Continental Valves Ltd.
6.5. We are inclined to set aside this comparable back to Ld.TPO for due verification of functional similarities/dissimilarity of this company with that of assessee. Assessee is directed to provide entire company profile along with its full financials to Ld. TPO for the year under consideration. Ld. TPO shall then verify and compare the functional similarity of the manufacturing segment undertaken by this comparable with that of assessee to 13 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi consider/reject this company for the purposes of determining ALP of international transaction.
6.6. Dynamatic Technologies Ltd.
Ld.AR submits that this company has huge turnover of Rs.406.22 crores during the year under consideration which is 20 times more than that of assessee. It is also submitted that this company is a listed company on various Stock Exchanges including BSE. It is also submitted that this comparable has been consistently rejected by applying turnover filter in the immediately preceding assessment years, being 2011-12 and 2012-13 which has now attained finality, and no adverse view has been taken by Ld. TPO therein. 6.7. On the contrary Ld. CIT DR submits that this comparable produces products for the application in Automotive sector, aerospace sector, agricultural equipment, industry and construction equipment. It manufactures hydraulic gear, pumps, fluid power system etc. It is also submitted that in the TP report placed at page 177-179 of paper book assessee has not placed complete details in respect of functions performed by this company as well as complete financials and therefore it is very difficult to establish the functional similarity of this company with that of assessee. By placing reliance upon the observations of Ld. TPO, he submitted that this company is functionally similar with that of assessee.
6.8. We have perused the submissions advanced by both the sides in the light of the records placed before us.
14ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi 6.9. We are unable to verify the functional comparability of this company with assessee due to insufficient materials regarding this comparable. However from observations of Ld. TPO we observe that this company is into manufacturing activity of engineering products with huge turnover.
We accordingly set aside this comparable back to Ld.TPO for due verification of the functional similarities/dissimilarity of this company with that of assessee. Assessee is directed to provide entire company profile along with its full financials to Ld. TPO for the year under consideration. Ld. TPO shall then verify and compare the functional similarity of manufacturing segment undertaken by this comparable with that of assessee to consider/reject this company for the purposes of determining ALP of international transaction.
6.10. Ld.AR placed reliance upon decision of Hon'ble Delhi High Court in the case of CIT vs. Agnity India Technologies Pvt. Ltd., reported in [2013] 36 taxmann.com 289, to substantiate his contention regarding the comparability based upon turnover being a relevant factor. He emphasised that turnover filter depends upon broad base of skilled employees who gives better output as well as a better position to bargain price to attract customers, as compared to small company which do not have such benefits which in turn affects turnover due to low profit margin.
6.11. We have perused the decision relied upon by Ld.AR. It is observed that Ld.AR did not dispute functional dissimilarity between the assessee with WIPL Ltd., & Dynamatic Technologies 15 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi that have been argued for exclusion due to high turnover. As observed hereinabove, we do not have before us financials and complete functional profile of these comparables in the paper book and are unable to ascertain authenticity of arguments advanced by Ld.AR. Further we are unable to ascertain whether there are any segmental information in respect of manufacturing segment undertaken by these comparables and the risk assumed by these comparables to be compared with that of assessee, which is an important factor that could affect the turnover of companies. Therefore in our considered opinion Ld.TPO shall verify from the records placed by assessee as directed hereinabove. We also direct Ld.TPO to decide comparability of these companies, with that of assessee by taking into consideration observations made by Hon'ble Delhi High Court in the case of CIT vs. Agnity India Technologies Pvt. Ltd., (supra) for purposes of applying Turnover filter.
6.12. Accordingly these grounds raised by assessee stand allowed for statistical purposes.
7. Ground No.8 This ground raised by assessee is for not considering foreign exchange gain/loss, as operating item and provision for bad debts and bank charges/fixed interest as non-operating expenses for the purpose of computing PLI of assessee as well as that of comparables.
7.1. Ld.AR submitted that DRP directed Ld.A.O. to consider foreign exchange gain/loss as operating item and provision for bad 16 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi debts and bank charges/fixed interest as non-operating expenses for purpose of computing PLI of assessee as well as that of comparables. And Assessing Officer has not provided details of PLI computation. He submitted that there has been certain mistakes and accordingly assessee had made application under section 154 of the Act. Ld. AO rejected the application vide order dated 19/12/17. Ld.AR submitted that even in TP study margins of comparables being Bemko Hydraulic's Ltd., and Roto pumps Ltd. for the year under consideration were shown to be 2.37 and 13.83 respectively, which after DRP direction Ld. AO worked out at 3.60% and 13.77% respectively.
7.2. Ld.AR thus submitted that in the event, directions of DRP are strictly followed, Continental Valves Ltd. would be an acceptable comparable and PLI of Bemko Hydraulic's Ltd., and Roto Pumps Ltd. would be reworked to 3.60% and 13.77% respectively. He submitted that then adjustment would be restricted to Rs. 44, 36, 124/-.
7.3. Ld. CIT DR submitted that admittedly Ld.A.O. has not followed directions of DRP and accordingly this ground can be set- aside to Ld. AO for reworking of PLI, as per the directions of DRP. 7.4. We have perused the submissions advanced by both the sides in the light of the records placed before us.
7.5. It is observed that Ld. AO has failed to follow directions of DRP and has computed incorrect PLI of comparables. This is evident from order passed by Ld. TPO under section 154 of the Act, which is placed at pages 288-289 of paper book. We also direct Ld. 17 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi TPO to provide the computation of PLI in respect of the comparables to assessee in the interest of principle of natural justice.
7.6. Accordingly this ground raised by assessee stands allowed for statistical purposes.
8. Ground No. 9-10 These grounds have been raised by assessee against incorrect calculation of operating cost and operating revenue of assessee. 8.1. Ld.AR submitted that Ld. TPO has inadvertently considered figure of total expenses of Rs.20,56,35,378/-instead of actual operating cost being Rs.20,48,90,405/-. He referred to page No. 287 and 296 of paper book, in order to demonstrate the mistake. Ld.AR submitted that Ld. TPO has erroneously computed arm's length by considering total expenses instead of operating cost. He submitted that Ld. TPO/AO considered total revenue amounting to Rs.20,82,34,754/- for calculation of transfer pricing adjustment instead of operating revenue amounting to Rs.20,77,65,823/-. 8.2. Ld. CIT DR submitted that the issue may be sent back to Ld. AO for reworking of adjustment by considering correct figures. 8.3. We have perused the submissions advanced by both the sides in the light of the records placed before us.
8.4. Ld.TPO is directed to look into the computation and adopt correct figures as per law. Assessee is thus directed to provide all necessary details for purposes of computing the value of international transaction as per law.
18ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi 8.5. Accordingly this ground raised by assessee stands allowed for statistical purposes.
9. Ground No. 11This ground has been raised by assessee for considering the proportionate transfer pricing adjustment made by assessee suo moto in the return of income.
9.1. Ld.AR submitted that upon granting necessary adjustment as per the DRP directions as well as adopting correct figures for purpose of computing value of international transaction, adjustment would be less than the amount that has been suo moto offered by assessee in return of income, at Rs.56,10,222/- .
Ld.AR thus submitted that in the event upon recomputing the value of international transaction the adjustment determined by Ld. TPO is less than adjustments so offered by assessee, then no further adjustment can be made by Ld. TPO.
9.2. Ld. CIT DR did not object to the proposition advanced by Ld.AR.
9.3. We have perused the submissions advanced by both the sides in the light of the records placed before us.
9.4. We agree with the proposition made by Ld.AR regarding restricting adjustment to Rs.56,10,222/- suo moto offered by 19 ITA 7803/Del/2017 A.Y. 2013-14 Bucher Hydraulics P Ltd., Gurgaon vs. ITO, Ward 5(2), New Delhi assessee, in the event adjustment to be recomputed by Ld. TPO/AO (as per the directions hereinabove) is less than Rs.56,10,222/-.
9.5. Accordingly this ground raised by assessee stands allowed.
10. In the result, appeal filed by assessee stands allowed as discussed above.
Order pronounced in the Open Court on 13.04.2018.
Sd/- Sd/-
(N.K.SAINI) (BEENA A PILLAI)
Accountant Member Judicial Member
Dated: 13th April, 2018.
· mv
Copy of the Order forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
6. Guard File
By Order
Asst. Registrar
ITAT, Delhi Benches, New Delhi
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