Skoda auto India Pvt. Ltd.(SAIPL), Aurangabad V. ACIT, Cir.-1, Aurangabad

CO 34/PUN/2011

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2670 (ITAT-PUNE)
• Duration Of Justice: 7 year(s) 10 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-04-2019
• Assessment Year: 2004-2005
• Appeal Filed On: 15-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Keywords: Related party transaction; Transfer pricing; International transaction
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO , AM . / ITA NO. 1 54 /P U N/20 1 1 / ASSESSMENT YEAR : 20 04 - 05 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 1, AURANGABAD . / APPELLANT VS. M/S. SKODA AUTO INDIA PVT. LTD., A - 1/1, FIVE STAR INDUSTRIAL AREA, MIDC, SHENDRA, AURA NGABAD PAN : AAECS3749M . / RESPONDENT . /CO. 34 PUN/201 1 / ASSESSMENT YEAR : 2004 - 05 (ARISING OUT OF ITA NO.154/PUN/2011 ) M/S. SKODA AUTO INDIA PVT. LTD., A - 1/1, FIVE STAR INDUSTRIAL AREA, MIDC, SHENDRA, AURA NGABAD PAN : AAECS3749M . / CROSS OBJECT OR VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 1, AURANGABAD . / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI S.B. PRASAD / DATE OF HEARING : 02 . 04 .201 9 / DATE OF PRONOUNCEMENT: 10 . 0 6 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE AGAINST THE ORDER OF CIT (A), AURANGABAD , D ATED 16.11.2010 ITA NO. 1 54 /P U N/20 1 1 C.O NO. 3 4/PUN/201 1 2 RELATING TO ASSESSMENT YEAR 200 4 - 05 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE APPEAL FILED BY REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE WERE HEARD TOGETHER AND ARE BEING DI SPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE REVENUE IN ITA NO. 1 54 /PUN/201 1 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE HON ' BLE CIT(A) ERRED IN CONSIDERING HONDA SIEL , HYUNDAI MOTORS AND MARUTI UDYOG AS NOT COMPARABL E COMPANIES TO THAT OF THE APPELLANT WITHOUT TAKIN G INTO CONSIDERATION THAT IN CASE OF THESE COMPANIES , THE QUANTUM O F TOTAL RELATED PART Y TRAN S ACTIONS IS LESS THAN 25% OF TOTAL TRANSACTIONS AND THE SAID COMPANIES WERE ALSO SELECTED AS COMPARABLES BY THE A PPELLANT ITSELF FOR THE AY 2003 - 04. 2. THE HON ' BLE CIT(A) ERRED IN CONSIDERING HINDUSTAN MOTOR S A S A COMP A RABLE COMP A N Y FOR THE PURPOSE OF DETERMINING COMPANIE S COMPARABLE TO THAT OF TH E APP E LLANT WITHOUT TAKING INTO CONSIDERATION THAT IT INCURRED LO SS F OR THE Y EAR UNDER CON S IDERATION ON ACCOUNT OF ABNORMAL CIRCUMSTANCES. 3. T HE HON'BLE CIT(A) ERRED IN DIRECTING THE AO TO ALLOW ECONOMIC ADJUSTMENT TOWARDS ADDITIONAL NON - CENVATABLE DUTIES PAID BY THE APPELLANT VIS - A - VIS THE COMPARABLE COMPANIES WITHOUT C ONSIDERING THAT THE BUSINESS MODEL FOLLOWED BY THE APPELLANT IS CONSISTENTLY SAME OVER A PERIOD OF TIME. 4. WITHOUT PREJUDICE TO THE ABOVE, THE HON'BLE CIT(A) ERRED IN NEITHER SPECIFYING THE QUANTUM OF ADJUSTMENT ON ACCOUNT OF ADDITIONAL NON - CENVATABLE D UTIES PAID BY THE APPELLANT, WHICH IS TO BE ALLOWED TO THE APPELLANT NOR SUGGESTING ANY METHODOLOGY FOR DETERMINING SUCH QUANTUM OF ADJUSTMENT. 5. THE HON'BLE CIT(A) ERRED IN DIRECTING THE AO TO ALLOW THE ADJUSTMENT ON ACCOUNT OF UNDER UTILIZATION OF CAP ACITY WHICH IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE RULE 10B(1)(E)(III) OF THE INCOME - TAX RULES, 1962 AS WELL AS THE DECISION OF HON'BLE ITAT IN CASE OF GLOBAL VANTEDGE PVT. LTD. (2010 - TIOL - 24 - ITAT - DEL). 6. WITHOUT PREJUDICE TO THE ABOVE, THE HON 'BLE CIT(A) ERRED IN NEITHER SPECIFYING THE QUANTUM OF ADJUSTMENT ON ACCOUNT OF UNDER UTILIZATION OF CAPACITY, WHICH IS TO BE ALLOWED TO THE APPELLANT NOR SUGGESTING ANY METHODOLOGY FOR DETERMINING SUCH QUANTUM OF ADJUSTMENT. 7. THE ORDER OF THE AO BE RES TORED AND THAT OF THE CIT(A) BE VACATED. ITA NO. 1 54 /P U N/20 1 1 C.O NO. 3 4/PUN/201 1 3 8. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY GROUNDS OF APPEAL. 4. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) WHILE DECIDING THE ISSUES RAISED IN RELATION TO THE TRANSFER PRICING PROVISI ONS . 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FILED ORIGINAL RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,70,07,180/ - . THE ASSESSEE HAD ENTERED INTO SEVERAL INTERNATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISES. THE ASSESSING OFFIC ER MADE REFERENCE TO THE TRANSFER PRICING OFFICER FOR DETERMINING THE ARMS LENGTH PRICE OF THE PURCHASES AND SERVICES AVAILED BY THE ASSESSEE COMPANY U/S.92CA(1) OF THE ACT. THE TRANSFER PRICING OFFICER NOTED THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF PASSENGER CARS. THE TRANSFER PRICING OFFICER ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY ADJUSTMENTS ON THE BASIS SIMILAR TO THE BASIS ADOPTED BY THE TRANSFER PRICING OFFICER FOR ASSESSMENT YEAR 2003 - 04 BE NOT ADOPTED . THE ASSESSEE FILED REPLY STATING THAT THE EARLIER ORDERS BASIS BE NOT ADOPTED FOR DETERMINING THE ARMS LENGTH PRICE OF THE INTERNATIONAL TRANSACTION. HOWEVER, THE TRANSFER PRICING OFFICER REJECTED THE SAME. THE ASSESSEE HAD APPLIED TRANSACTIONAL NET MARGIN METHOD (TNMM) AND HAD SELECTED 4 COMPARABLE COMPANIES I.E. BAJAJ TEMPO LTD., HINDUSTAN MOTORS LTD., MAHINDRA & MAHINDRA LTD. AND TATA MOTORS . AS COMPARED TO LAST YEAR THE COMPANIES MARUTI UDYOG LTD., HYUNDAI MOTORS AND HONDA SIEL CARS INDIA LTD. W ERE REJECTED, BY APPLYING RPT FILTER OF 15% . IN ORDER TO BE CONSISTENT, THE TRANSFER PRICING OFFICER WAS OF THE VIEW THAT THE COMPANIES CONSIDERED IN ASSESSMENT YEAR 2003 - 04 NEED TO BE CONSIDERED DURING THE YEAR. THE COMPANIES WERE HONDA SIEL , HYUNDAI MO TORS AND MARUTI UDYOG . FURTHER, HINDUSTAN MOTORS WAS REJECTED BEING CONSISTENTLY LOSS MAKING. ACCORDINGLY, THE TRANSFER PRICING OFFICER DREW UP THE LIST OF FINAL COMPARABLES TOTALLING 6 AND THE MEAN MARGIN OF THE SAID COMPANY WAS 6.64% , AS AGAINST THE MA RGIN OF THE ASSESSEE AT ( - ) 7.25% ; THE TRANSFER ITA NO. 1 54 /P U N/20 1 1 C.O NO. 3 4/PUN/201 1 4 PRICING OFFICER PROPOSED AN UPWARD ADJUSTMENT OF RS.52,01,32,552/ - . THE ASSESSING OFFICER PASSED AN ASSESSMENT ORDER PROPOSING THE SAID ADDITION OF RS.52.01 CRORE AGAINST WHICH THE ASSESSEE FILED AN APPEAL B EFORE THE CIT(A). 6. BEFORE THE CIT(A), THE FIRST PLEA OF THE ASSESSEE WAS THAT THE COMPANIES WITH RELATED PARTY TRANSACTIONS (RPT) SHOULD BE REJECTED. HOWEVER, IT WAS POINTED OUT THAT IN THE AUTOMOBILE SECTOR IT WAS VERY DIFFICULT TO HAVE COMPANIES WITH NO RELATED PARTY TRANSACTIONS. HENCE, ALL COMPANIES WITH RELATED PARTY TRANSACTIONS EXCEEDING 15% OF THE TOTAL INCOME BE REJECTED AS COMPA RABLES . THE ASSESSEE ALSO REFERRED TO THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSM ENT YEAR 2003 - 04 REPORTED IN 122 TTJ 699 (PUNE), ORDER DATED 12 - 03 - 2009 WHEREIN IT WAS HELD THAT THE TRANSACTION HAS TO BE BETWEEN TWO ENTITIES WHICH COULD NOT INFLUENCE OR CONTROL EACH OTHER DECISIONS. THE CIT(A) OBSERVED THAT IN VIEW OF THE SAME THE INC LUSION OF HONDA SIEL , HYUNDAI MOTORS AND MARUTI UDYOG IN THE FINAL SET OF COMPARABLES WAS NOT WARRANTED. REFERENCE WAS MADE TO RULE 10B(1)(E)(III) OF THE INCOME TAX RULES IN THIS REGARD. WITH REGARD TO HINDUSTAN MOTORS WHERE THE PLEA OF THE ASSESSEE WAS THAT IT WAS FUNCTIONALLY COMPARABLE AND IT WAS NOT A CONSISTENT OPERATING LOSS MAKING COMPANY ; T HE CIT(A) DID NOT AGREE WITH THE ORDER OF THE ASSESSING OFFICER/TRANSFER PRICING OFFICER , SINCE HINDUSTAN MOTORS HAD MADE OPERATIVE PROFIT OF 0.11% DURING FINAN CIAL YEAR ENDING 31 - 03 - 2003. THE CIT(A) THUS DIRECTED THE ASSESSING OFFICER TO INCLUDE HINDUSTAN MOTORS IN THE FINAL SET OF COMPARABLES. 7. THE NEXT ISSUE WHICH WAS DECIDED BY THE CIT(A) WAS THE ADJUSTMENTS ON ACCOUNT OF HIGH LEVEL OF IMPORTS AND UNDER U TILIZATION OF THE CAPACITY. RELYING ON THE EARLIER ORDERS AND THE DECISIONS OF OTHER CASES, THIS ADJUSTMENT WAS ALSO ALLOWED TO THE ASSESSEE. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). ITA NO. 1 54 /P U N/20 1 1 C.O NO. 3 4/PUN/201 1 5 8. GROUND OF APPEAL NO.1 BY THE REVENUE IS AGAINST EXCLU SION OF HONDA SIEL , HYUNDAI MOTORS AND MARUTI UDYOG FROM THE FINAL SET OF COMPARABLES ON THE GROUND THAT THE QUANTUM OF TOTAL RELATED PARTY TRANSACTIONS WAS LESS THAN 25% OF THE TOTAL TRANSACTION AND HENCE THEIR MARGINS COULD BE APPLIED . 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE COMPARABLES SELECTED IN PRECEDING YEAR WERE APPLIED BY THE ASSESSEE BOTH FOR INCLUSION AND EXCLUSION OF THE COMPANIES. 10. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER DID NOT APPLY RPT FILTER WHEREAS THE CIT(A) HAD APPLIED A FILTER OF 15%. BY SUCH MEASURING THE THREE CONCERNS HONDA SIEL , HYUNDAI MOTORS AND MARUTI UDYOG WERE EXCLUDED FROM THE FINAL SET OF COMPARABLES BY THE CIT(A). HOWEVER, T HE REVENUE IS IN APPEAL AGAINST THE SAME . IT IS FURTHER POINTED OUT BY THE ASSESSEE THAT IN THE ASSESSMENT YEAR 2005 - 06 , THE TRANSFER PRICING OFFICER HAD APPLIED FILTER OF 25%. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WH ICH ARISES IN THE PRESENT APPEAL VIDE GROUND NO.1 RAISED BY THE REVENUE IS AGAINST THE APPLICATION OF RPT FILTER. THE REVENUE IS AGGRIEVED AND HAS POINTED OUT THAT THE RPT FILTER WHICH IS APPLIED WAS LESS THAN 25% OF THE TOTAL TRANSACTION AND HENCE, THREE CONCERNS ORIGINALLY SELECTED BY THE TRANSFER PRICING OFFICER SHOULD BE INCLUDED FOR BENCHMARKING THE INTERNATIONAL TRANSACTION BETWEEN THE ASSESSEE AND ITS ASSOCIATED ENTERPRISE. THE ASSESSEE IN THE PRESENT CASE WHILE BENCHMARKING THE INTERNATIONAL TRANS ACTION UNDERTAKEN , HAD EXCLUDED THREE CONCERNS HONDA SIEL , HYUNDAI MOTORS AND MARUTI UDYOG ON THE GROUND OF RPT FILTER OF 15%, THOUGH THEY WERE FUNCTIONALLY SIMILAR TO THE ASSESSEE. THE ASSESSEES OBJECTION TO THE SAME WAS THAT THE MARGINS OF THE SAID CON CERNS COULD NOT BE APPLIED BECAUSE THEY DO NOT FULFIL THE RPT FILTER. IN SEVERAL CASES, THE TRIBUNAL HA D HELD THAT WHILE BENCHMARKING THE ITA NO. 1 54 /P U N/20 1 1 C.O NO. 3 4/PUN/201 1 6 INTERNATIONAL TRANSACTION BETWEEN THE ASSESSEE AND ITS ASSOCIATED ENTERPRISE AND COMPARING THE MARGINS WITH MARGINS O F CONCERNS, THEN ONE OF THE FILTER TO BE APPLIED IS RPT FILTER . 12. SUCH IS THE PROPOSITION LAID DOWN IN SONY INDIA PVT. LTD. REPORTED IN 106 TTJ 175 (DEL). THE OBSERVATIONS ARE REPRODUCED UNDER PARA 4.3 AT PAGE 7 OF APPELLATE ORDER. 13. APPLYING THE SAID FILTER OF RPT, THE BENCHMARKING HAS TO BE CARRIED OUT. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE ASSESSING OFFICER DID NOT APPLY ANY RPT FILTER BUT THE CIT(A) HAD APPLIED RPT FILTER OF 15% AND THE THREE CONCERNS WERE EXCLUDED IN THE HANDS OF THE ASSESSEE. IN VIEW THEREOF, WE FIND NO MERIT IN THE ISSUE RAISED BY THE REVENUE VIDE GROUND OF APPEAL NO.1. WE HOLD THAT THE RPT FILTER NEEDS TO BE APPLIED IN THE PRESENT SET OF FACTS AND THE THREE CONCERNS HAVING NOT FULFILLED RPT FILTER CANNOT BE INCLUDED IN THE F INAL LIST OF COMPARABLES. IN THE CASE OF ASSESSEE ITSELF, THE ASSESSING OFFICER / TPO HAD APPLIED RPT FILTER OF 25% IN ASSESSMENT YEAR 2005 - 06. HENCE, THERE IS NO MERIT IN PLEA OF REVENUE. GROUND OF APPEAL NO.1 BY THE REVENUE IS DISMISSED. 14. THE ISSU E RAISED VIDE GROUND OF APPEAL NO.2 IS AGAINST THE INCLUSION OF HINDUSTAN MOTORS AS FUNCTIONALLY COMPARABLE. THE CASE OF THE ASSESSING OFFICER WAS THAT IT CANNOT BE INCLUDED IN THE FINAL LIST OF COMPARABLES ON THE GROUND THAT IT INCURRED LOSS ES DURING THE YEAR. HOWEVER, AS POINTED OUT BY THE CIT(A), THE SAID CONCERN WAS NOT PERSISTENT LOSS MAKING CONCERN AND IN SUCH CIRCUMSTANCES, THERE IS NO MERIT IN EX CLUDING HINDUSTAN MOTORS FROM THE FINAL LIST OF COMPARABLES. ACCORDINGLY, WE UPHOLD THE ORDER OF CI T(A) IN THIS REGARD AND DISMISS GROUND OF APPEAL NO.2 RAISED BY THE REVENUE. 15. NOW COMING TO THE GROUNDS OF APPEAL NO.3 AND 4 RAISED BY THE REVENUE ARE AGAINST THE ECONOMIC ADJUSTMENT ON IMPORT DUTY AND GROUNDS OF APPEAL ITA NO. 1 54 /P U N/20 1 1 C.O NO. 3 4/PUN/201 1 7 NO.5 AND 6 ARE AGAINST THE ADJUSTMEN TS TO BE ALLOWED ON ACCOUNT OF CAPACITY UNDER UTILIZATION. 16. THE LEARNED DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT NO SUCH CAPACITY UTILIZATION ADJUSTMENT WAS ALLOWED BY THE TRANSFER PRICING OFFICER ON THE GROUND THAT NO METHOD WAS PRESCRIBED IN THE ACT. 17. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IF GROUNDS OF APPEAL NO.5 AND 6 ARE DECIDED AND THEY ARE DISMISSED, THEN GROUNDS OF APPEAL NO.3 AND 4 WOULD BECOME ACADEMIC. HE POINTED OUT THAT THIS WAS THE SECOND FULL YEA R OF OPERATION WHEREIN THE ASSESSEE HAD ONLY UTILIZED 33% OF THE TOTAL CAPACITY , WHEREAS THE COMPARABLES HAD UTILIZED 50% TO 70% OF AVERAGE CAPACITY. IN SUCH CIRCUMSTANCES, ADJUSTMENT ON ACCOUNT OF UNDER UTILIZATION IS TO BE ALLOWED AND THE MARGINS OF TH E COMPARABLES SHOULD BE ADJUSTED ACCORDINGLY. IN THIS REGARD, RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN TASTY BITE EATABLES VS. ACIT REPORTED IN 59 TAXMANN.COM 437 (PUNE - TRIB), VISHAY COMPONENTS (P) LTD. VS. ACIT REPO RTED IN 79 TAXMANN.COM 281 (PUNE - TRIB.) AND THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN CIT VS. PETRO ARALDITE (P) LTD. REPORTED IN 93 TAXMANN.COM 428 (BOMBAY). 18. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY POINTED OUT THAT THE CIT(A) DID NOT SAY HOW THE SAID CAPACITY ADJUSTMENT ON ACCOUNT OF CAPACITY UTILIZATION IS TO BE ALLOWED, I.E. HOW THE MARGINS OF THE COMPARABLES ARE TO BE ADJUSTED. HOWEVER, THE DELHI BENCH OF THE TRIBUNAL IN DCIT VS. CLASS INDIA (P) LTD. REPORTED IN 62 TAXMANN .COM 173 (DELHI - TRIB.) HAD PRESCRIBED THE METHOD WHICH MAY BE APPLIED. 19. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH IS ARISING BY GROUND OF APPEAL NOS. 5 AND 6 IS AGAINST THE ORDER OF CIT(A) IN DIRECTING THE ASSESSING OFFICER/TRANSFER PRICING OFFICER TO ALLOW CAPACITY ITA NO. 1 54 /P U N/20 1 1 C.O NO. 3 4/PUN/201 1 8 UTILIZATION ADJUSTMENT. THE ASSESSEE IS IN SECOND YEAR OF OPERATION AND HAS POINTED OUT THAT IT HAS ONLY UTILIZED 33% OF THE TOTAL CAPACITY WHEREAS THE COMPARABLES HAVE ON AN AVERAGE UTILIZED 50 TO 70% OF THE TOTAL CAPACITY AND HENCE, THE MARGINS OF THE COMPARABLES NEED TO BE ADJUSTED ACCORDINGLY. 20. THE HONBLE BOMBAY HIGH COURT IN CIT VS. PETRO ARALDITE (P) LTD. (SUPRA) HAD HELD THAT WHILE COMPUTING THE ARMS LENGTH PRICE WHEREIN ADJUSTMENTS NEED TO B E MADE IN THE HANDS OF THE COMPARABLES AND WHERE THERE WAS DIFFERENCE IN LEVEL OF CAPACITY UTILIZATION OF ASSESSEE AND LEVEL OF CAPACITY UTILIZATION OF THE COMPARABLES, THEN ADJUSTMENT WOULD BE REQUIRED TO BE MADE TO PROVIDE MARGINS OF THE COMPARABLES IN T ERMS OF RULE 10B(1)(E)(III) OF THE INCOME TAX RULES. SIMILAR IS THE PRO POSITION LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN TASTY BITE EATABLES LTD. VS. ACIT (SUPRA) AND VISHAY COMPONENTS PVT. LTD. VS. ACIT (SUPRA). 21. THE DELHI BENCH OF THE TRIBUNAL IN DCIT VS. CLASS INDIA PVT. LTD. HAS LAID DOWN THE PROCEDURE FOR COMPUTING CAPACITY UTILIZATION ADJUSTMENT UNDER THE TNM METHOD . HENCE, WE HOLD THAT THE SAID PROCEDURE BE APPLIED BY THE ASSESSING OFFICER/TRANSFER PRICING OFFICER TO WORK OUT THE ADJUSTME NT ON ACCOUNT OF CAPACITY UTILIZATION. WE DIRECT ACCORDINGLY. THE GROUNDS OF APPEAL NO.5 AND 6 BY THE REVENUE ARE THUS DISMISSED. IN VIEW OF THE CONCESSION OF THE ASSESSEE, THE GROUNDS OF APPEAL NO.3 AND 4 BECOME ACADEMIC AND THE SAME ARE DISMISSED. 22 . NOW COMING TO THE REVISED MEMO OF CROSS OBJECTION FILED BY THE ASSESSEE; IT WAS POINTED OUT THAT THE GROUNDS RAISED IN THE SAID MEMO OF CROSS OBJECTION ARE IN SUPPORT OF THE ORDER OF CIT(A). IN VIEW THEREOF, THERE IS NO MERIT IN THE SAID GROUNDS RAISED IN THE CROSS OBJECTION AND THE SAME ARE DISMISSED. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND OF APPEAL TO THE CROSS OBJECTION AND IT WAS POINTED OUT THAT THE SAME WOULD BECOME ACADEMIC IF THE REVENUES APPEAL IS DISMISSED. SINCE WE HAVE ALREADY DECI DED THE ITA NO. 1 54 /P U N/20 1 1 C.O NO. 3 4/PUN/201 1 9 APPEAL OF THE REVENUE AND DISMISSED THE APPEAL IN THE PARAS ABOVE, WE DISMISS THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE AS ACADEMIC. 23. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THIS 10 TH DAY OF JUNE , 201 9 . SD/ - SD/ - (D.KARUNAKARA RAO) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER PUNE ; DATED : 10 TH JUNE, 2019 / GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS) , AURANGABAD . 4. THE CIT , AURANGABAD 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER, / / TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE