Kolkata ITAT Directs TPO To Follow DRP's Directions With Respect To Aggregation Approach
Pankaj Bajpai
15 March 2024 7:30 PM IST
The Kolkata ITAT remitted the case of ALP adjustment qua payment of Cylinder Rental Charges and import of Fixed Assets in case of assessee (engaged in manufacture, storage, and transmission of industrial gases as well as execution of turnkey cryogenic/gas engineering and project design requirements) for AY 2012-13.The Bench comprising Dr. Manish Borad (Accountant Member) and Mr. Anikesh...
The Kolkata ITAT remitted the case of ALP adjustment qua payment of Cylinder Rental Charges and import of Fixed Assets in case of assessee (engaged in manufacture, storage, and transmission of industrial gases as well as execution of turnkey cryogenic/gas engineering and project design requirements) for AY 2012-13.
The Bench comprising Dr. Manish Borad (Accountant Member) and Mr. Anikesh Banerjee (Judicial Member) observed that “TPO should follow the direction of DRP and the issue of purchase of fixed assets applicability of ROCE will not be accepted and TPO should make a separate re-workings of the margin, vis-a-vis the international transaction of purchase of fixed assets pursuant to the rejection of comparables of DRP's direction as retained the original transfer pricing adjustment of Rs.6,86,42,156/- vis-à-vis impugned transaction of purchase of fixed assets”. (Para 9)
As per the brief facts of the case, the assessee had filed MA for recalling earlier order of Tribunal. The DRP had rejected TPO's denial of assessee's aggregation approach for benchmarking, and TPO's application of PLI as return on capital employed (ROCE, as opposed to assessee's OP/Sales PLI) and TPO's selection of comparables.
The Bench observed that the TPO has passed the rectified order under section 92CA(3) read with section 144C(5) dated 26.12.2016 in pursuance of the direction of the DRP dated 22.11.2016.
The Bench directed that assessee's TNMM should be taken instead of ROCE, and that aggregation method will be applicable for the TP Study.
The Bench therefore remitted the matter to TPO to make a separate re-workings of the margin, vis-a-vis the international transaction of purchase of fixed assets pursuant to the rejection of comparables of DRP's direction as retained the original transfer pricing adjustment ... vis-a-vis impugned transaction of purchase of fixed assets.
Counsel for Appellant/ Assessee: Ketan Kumar Ved and Amit Poddar.
Counsel for Respondent/ Revenue: Rakesh Kumar Das
Case Title: Linde India Limited (Formerly BOC India Limited) vs DCIT
Case Number: ITA No 381/KOL/2017
Click here to read/ download the Order
