Pentair Water India Pvt. Ltd., Goa V. Dy. Commissioner, Circle-1., Margao

ITA 162/PAN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2110 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 15-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GANAPATI BHAT
• Keywords: Transfer pricing
• Section: 143(3); 10B; 147; 148; 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 162 /P A N/201 4 (ASST. YEAR : 2008 - 09 ) M/S. PENTAIR WATER INDIA PVT. LTD., L - 55, VERNA INDUSTRIAL ESTATE, VERNA, SALCETE, GOA. VS. DCIT, CIRCLE - 1, MARGAO GOA. PAN NO. AABCS 8856 L (APPELLANT) (RESPONDENT) ITA NO S . 223 & 224 /P A N/201 4 (ASST. YEAR S : 200 6 - 0 7 & 2008 - 09 ) ACIT, CIRCLE - 1, MARGAO GOA. VS. M/S. PENTAIR WATER INDIA PVT. LTD., L - 55 , VERNA INDUSTRIAL ESTATE, VERNA , SALCETE, GOA . PAN NO. AABCS 8856 L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PADAM KHINCHA C A WITH SHRI RAKESH KHINCHA - CA DEPARTMENT BY : SHRI GANAPATI BHAT - D R DATE OF HEARING : 03 / 0 5 /201 6 . DATE OF PRONOUNCEMENT : 03 / 0 5 /201 6 . O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER ITA NO. 223/PAN/2014 THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - IV, BANGALORE IN APPEAL NO. 174/ MRG/ CIT(A) - IV/2012 - 13 , DATED 25/04/2014 FOR THE ASSESSMENT YEAR 2006 - 07. 2 ITA NO S . 162 , 223 & 224 /P A N/201 4 2. SHRI GANAPATI BHAT, CIT - DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI PADAM KHINCHA, CA ALONG WITH SHRI RAKESH KHINCHA, CA REPRESENTED ON BEHA LF OF THE ASSESSEE. 3 . IT WAS SUBMITTED BY THE DEPARTMENTAL REPRESENTATIVE THAT IN G ROUND NO.2 OF THE REVENUES APPEAL, THE REVENUE HAS CHALLENGED THE ACTION OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING MARKETING COST ADJUSTMENT OF 12.31% TO THE COMPARABLE UNCONTROLLED PRICE IGNORING THE FACT THAT VOLUME DISCOUNT ADJUSTMENT MAD E BY THE TPO IS ALREADY FACTORED IN THE SAID ADJUSTMENT . IT WAS THE SUBMISSION THAT THE ASSESSEE IS DEALING IN WATER TREATMENT PLANT. IT WAS THE SUBMISSION THAT ORIGINALLY THE ASSESSMENT HAD BEEN COMPLETED UNDER SEC. 143(3) ON 17/12/2009 , WHEREIN CERTAIN TRANSFER PRICING ADJUSTMENTS HAVE BEEN DONE. IT WAS THE SUBMISSION THAT THE SAID ASSESSMENT ORDER WAS SUBJECT MATTER OF AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND VIDE AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN ITA NO. 130/MRG/2008 - 09 DATED 19/11/2012 , THE COMMISSIONER OF INCOME TAX (APPEALS) HAD HELD THAT THE ADJUSTMENT COULD BE REASONABLY MADE AT 10.96% . IT WAS THE SUBMISSION THAT THE TPO HAD BY APPLYING THE CU P METHOD, GRANTED AN ADJUSTMENT OF 6.95%. IT WAS THE SUBMISSION THAT THIS ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WAS A SUBJECT MATTER BEFORE THE INCOME T AX APPELLATE TRIBUNAL , WHICH HAD VIDE AN ORDER DATED 17/0 4 /2014 UPHELD THE ADJUSTMENT AS DIRECTED BY THE COMMISSIONER OF IN COME TAX (APPEALS) AT 10.96%. IT WAS THE SUBMISSION THAT IN THE MEANTIME ON 15/12/2011 , THE SAID ASSESSMENT WAS REOPENED BY ISSUANCE OF NOTICE UNDER SEC. 148 AND THE REOPENED ASSESSMENT CAME TO BE COMPLETED UNDER SEC. 143(3) READ WITH SEC. 147 ON 04/02/2013 . IT WAS THE SUBMISSION THAT THE REOPENING WAS ONLY ON ACCOUNT OF THE DENIAL OF DEDUCTION UNDER SEC. 80IB. IT WAS THE SUBMISSION THAT THE SAID ASSESSMENT ORDER WAS SUBJECT MATTER OF IMPUGNED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS ) AND THE ORDER WAS PASSED 3 ITA NO S . 162 , 223 & 224 /P A N/201 4 BY THE COMMISSIONER OF INCOME TAX (APPEALS) ON 25/04/2014 , AGAINST WHICH , THE IMPUGNED APPEAL HAS BEEN FILED BY THE REVENUE. IT WAS THE SUBMISSION THAT IN PARA 10.1 OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), THE C OMMISSIONER OF INCOME TAX (APPEALS) HAD HELD THAT THE ADJUSTMENT ON ACCOUNT OF MARKETING EXPENSES WAS LIABLE TO BE GRANTED AT 12.31%. IT WAS THE SUBMISSION THAT THE TRIBUNAL HAVING HELD THE ADJUSTMENT AT 10.96% , THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DIRECTING THE ADJUSTMENT AT 12.31% WAS LIABLE TO BE REDUCED . 4 . IN REPLY , AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT IT WAS ONLY A N ARITHMETICAL ERROR AND THE SAME COULD BE CORRECT ED TO 10.96% . AT THIS POINT, THE BENCH HAD PUT A QUERY AS TO HOW THE ISSUES OF THE ADJUSTMENT IN RESPECT OF MARKETING EXPENSES IN RELATION TO TRANSFER PRICING COULD HAVE BEEN ADJUDICATED IN THE ORIGINAL APPEAL, WHEN THE ASSESSMENT ORDER , WHICH WAS SUBJECT MATTER OF AN APPEAL , WAS ALREADY REOPENED BY INVOKING THE PROVISIONS OF SEC. 148 . THE REOPENED ASSESSMENT ORDER CAME TO BE PASSED ON 04/02/2013 AND THE TRIBUNAL S ORDER IN RESPECT OF ORIGINAL ASSESSMENT WAS 20/03/2014 . A FURTHER QUERY WAS PUT TO BOTH THE PARTIES AS TO WHETHER IN THE REOPENED ASSESSMENT THE ASSESSING OFFICER HAS OBTAINED THE TPOS REPORT IN RESPECT OF TRANSFER PRICING ADJUSTMENT . IT WAS THE SUBMISSION THAT NO REPORT OF THE TPO HAD BEEN FILED IN THE COURSE OF THE REASSES SMENT PROCEEDINGS AND THE ASSESSING OFFICER HAD ADOPTED THE TPOS REPORT OBTAINED IN RELATION TO ORIGINAL ASSESSMENT ORDER PASSED ON 17/12/2009 . I N RESPECT OF CONTINUATION OF THE APPEAL PROCEEDINGS AFTER THE REOPENING HAS BEEN COMPLETED , NEITHER SIDE HAD ANY REPLY. 5. WE HAVE CONSIDERED THE SUBMISSIONS. ADMITTEDLY, WHEN ASSESSMENT IS REOPENED AND VALIDLY DONE, THEN ALL ISSUES REMAIN OPENED BEFORE THE ASSESSING OFFICER . I F ANY , TRANSFER PRICING ADJUSTMENT IS TO BE DONE, IT HAS TO BE DONE ONLY AFTER OBTAINING THE NECESSARY TPOS 4 ITA NO S . 162 , 223 & 224 /P A N/201 4 REPORT. ADMITTEDLY, THIS HAS NOT BEEN DONE IN THE PRESENT CASE. CONSEQUENTLY , AN ERROR HAS CREPT INTO THE ASSESSMENT ORDER PASSED UNDER SEC. 143(3) REA D WITH SEC. 147. A FURTHER PERUSAL OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN PARA 10.1 SHOWS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS RECORDED THAT NO SPECIFIC GROUNDS HAVE BEEN TAKEN OBJECTING TO THE ADJUSTMENTS MADE, BUT FOR T HE ASSESSMENT YEAR 2005 - 06 , HIS PREDECESSOR WAS OF THE VIEW THAT THE ADJUSTMENT ON ACCOUNT OF MARKETING EXPENSES SHOULD BE TU NE OF 12.31%. IT IS ALSO NOT CLEAR AS TO HOW WHEN NO SPECIFIC GROUND HAS BEEN RAISED BY THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DECIDED TO ADJUDICATE ON THE SAID ISSUE , ESPECIALLY , WHEN THE ASSESSING OFFICER HAS SPECIFICALLY MENTIONED IN HIS ORDER IN PAGE NO.2 OF HIS ASSESSMENT ORDER THAT THE ADDITION ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT IS BEING MADE FOR THE CURRENT YEAR SUBJECT TO THE FINAL DECISION OF THE ITAT AND D EPARTMENTS STAND IN RESPECT OF DECISION OF THE ITAT FOR THE AFORESAID ISSUE . IN ANY CASE, AS IT IS NOTICED THAT THERE HAS BEEN A PROCEDURAL ERROR IN COMPLETING THE ASSESSMENT UNDER SEC. 143(3) READ WITH SEC. 147 INSOFAR AS TPOS REPORT HAS NOT BEEN OBTAINED IN THE RE - ASSESSMENT PROCEEDINGS, WE ARE OF THE VIEW THAT THE ISSU E OF TRANSFER PRICING ADJUSTMENT IS LIABLE TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR OBTAINING TPOS ORDER BEFORE MAKING THE SAID TRANSFER PRICING ADJUSTMENT S AND WE DO SO . 6 . IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE . ITA NOS. 162 & 224/PAN2014 7 . ITA NO.162/PAN/2014 IS AN APPEAL FILED BY THE ASSESSEE AND ITA NO. 224/PAN/2014 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - IV, BANGALORE IN APPEAL NO. 519/MRG/ CIT(A) - IV/2011/12 FOR THE ASSESSMENT YEAR 2008 - 09 . 5 ITA NO S . 162 , 223 & 224 /P A N/201 4 8 . IT WAS SUBMITTED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ASSESSEE IS AN INDIAN COMPANY ENGAGED IN THE MANUFACTURE OF FIBRE GLASS PRESSURE VESSELS USED FOR WATER TREATMENT . IT WAS THE SUBMISSION THAT THE PRODUCTS OF THE ASSESSEE ARE MARKETED IN THE INTERNATIONAL MARKET BOTH DIRECTLY AS WELL AS THROUGH AES . IT WAS THE SUBMISSION THAT IT HAD TWO DIVISIONS , ONE WAS THE MANUFACTURING DIVISION IN RESPECT OF WHICH , NO TRANSFER PRICING ADJUSTMENTS HAVE BEEN MADE , THE SECOND WAS THE ENGINEERING SUPPORT SERVICE S/ITES . IT WAS THE SUBMISSION THAT THE ASSESSEE HAD PROVIDED A TRANSFER PRICING STUDY IN WHICH THE ASSESSEE HAD COMPARED ITS DATA BY APPLYING TNMM METHOD. IT WAS THE SUBMISSION THAT THE ASSESSEE WAS BASICALLY FOLLOWING THE PRINCIPLE OF COST + 12%. IT WAS THE SUBMISSION THAT THE TRANSFER PRICING STUDY BY THE ASSESSEE WAS REJECTED AND THE TPO HAD CONSIDERED 20 COMPANIES AS COMPARABLE IN THE FINAL SE T AND HAD DERIVED AT AVERAGE ARMS LENGTH MEAN MARGIN COST OF 24.5% AS AGAINST 12.02% DISCLOSED BY THE ASSESSEE. IT WAS THE SUBMISSION THAT ON APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THE COMMISSIONER OF INCOME TAX (APPEALS) HAD AGREED TO TH E CONTENTION OF THE ASSESSEE THAT TWO OF THE COMPANIES , NAMELY INFOSYS BPO LTD. AND W IPRO LTD. COULD NOT BE COMPARED TO THE ASSESSEE INSOFAR AS THE TURNOVER OF THE SAID TWO COMPANIES WAS MUCH HIGHER THAN THAT OF THE ASSESSEE. FOR THE REST OF THE 18 COMPANIES, THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THAT SAID COMPANIES W ERE COMPARABLE , ON WHICH THE ARMS LENGTH PRICE (ALP) ADJUSTMENTS NEEDS TO BE CARRIED OUT BY THE TPO. IT WAS THE SU BMISSION THAT THE REVENUE IS IN APPEAL AGAINST THE DELETION OF THE SAID TWO COMPANIES OUT OF THE 20 COMPARABLES AND THE ASSESSEE IS IN APPEAL AGAINST THE CONFIRMATION OF THE SAID 18 COMPANIES OUT OF 20 AS COMPARABLE . IT WAS THE SUBMISSION THAT ITES WAS A SPECIALIZED ENGINEERING SKILL SERVICES AND IT COULD BE COMPARED TO THE BPO BUSINESS . IN REPLY TO THE SPECIFIC QUERY AS TO WHETHER THERE ARE ANY COMPANIES IN INDIA WHICH IS DOING SIMILAR BUSINESS AS THE ASSESSEE , BOTH SIDES AGREED THAT THERE WAS NONE . IT W AS THE FURTHER SUBMISSION THAT THE ASSESSING 6 ITA NO S . 162 , 223 & 224 /P A N/201 4 OFFICER AND THE ASSESSEE HAD FOLLOWED TNMM M E THOD . IT WAS THE SUBMISSION THAT 05 METHODS ARE PRESCRIBED UNDER THE RULE 10B OF THE INCOME - TAX RULES BEING THE CU P METHOD WHICH WAS COMPAR A BLE ON THE BASIS OF THE PRICE. THE COST + METHOD AND THE RESALE PRICE METHOD WHICH WAS A GROSS PROFIT COMPARISON METHOD , AND THE TNMM METHOD AND THE PROFITS SPLIT METHOD WHICH WAS NET PROFIT COMPARABLE METHOD. IT WAS THE SUBMISSION THAT AS NONE OF THE METHODS OTHER THAN TNMM WA S PRA CTICAL GIVEN THE BUSINESS CONDITIONS, THE TNMM METHOD WAS ADOPTED. IT WAS THE SUBMISSION THAT COMMISSIONER OF INCOME TAX (APPEALS) HAD CONFIRMED THE 18 COMPANIES ONLY ON THE GROUND THAT THEY WERE ITES COMPANIES (INFORMATION TECHNOLOGY SERVICES) WHICH WERE THE SIMILAR TO THE ENGINEERING SKILL SERVICES PROVIDED BY THE ASSESSEE. IT WAS , THEN , PUT TO THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT IF THE ASSESSEE IS MAINTAINING A SPECIFIC METHODOLOGY BEING COST + 12% AS ITS PROFIT AND THIS METHO DOLOGY HAS BEEN ADOPTED RIGHT FROM THE BEGINNING AND THERE IS NO VARIATION TO THIS METHOD IN ANY OF THE YEARS EARLIER TO THE RELEVANT ASSESSMENT YEAR OR SUBSEQUENT, THEN HOW THE TNMM METHOD CAN BE ADOPTED, ESPECIALLY WHEN THE ASSESSEES BUSINESS DOES NOT H AVE AN IDENTICAL OR SIMILAR COMPARABLE COMPANY IN INDIA . I T WAS ALSO PUT TO THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE AS TO WHY INTERNATIONAL COMPANIES SHO U LD NOT BE CONSIDERED WHICH ARE DOING SIMILAR BUSINESS ACTIVITIES , AS THE ASSESSEE , IN INDIA. TO THIS, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE INTERNATIONAL DATA BASE WAS NOT EASILY AVAILABLE AND THE ECONOMIC CONDITIONS OUTSIDE INDIA AND IN INDIA VARIED SUBSTANTIALLY. IT WAS , THEN PUT TO THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT AS PER THE PROVISIONS OF RULE 10B( 3) AND 10C , INTERNATIONAL COMPANIES COULD BE CONSIDERED ESPECIALLY WHEN THE METHODOLOGY OF THE PROFIT MARGIN IS EASILY DETERMINABLE AND DID NOT CALL FOR ANY MAJOR ADJUSTMENT ESPECIALLY IN VIEW OF THE FACT THA T THE ASSESSEE IS FOLLOWING THE SIMPLE METHOD OF COST + 12%, IN SHORT 12% IS THE ASSESSEES PROFIT MARGIN ON THE COST. IF THIS IS SO, THE DATA BASE FROM THE INTERNATIONAL MARKET CANNOT BE SAID TO BE DIFFICULT OR 7 ITA NO S . 162 , 223 & 224 /P A N/201 4 IMPOSSIBLE TO OBTAIN IN THE PRESENT DAYS , WHEN COMMUNICATION IS SO EFFICIENT. FURTHER, ADMITTEDLY, THE ASSESSEES BUSINESS IN RESPECT OF THE ENGINEERING SKILL SERVICES IS UTILIZED SUBSTANTIALLY BY ITS PES OUTSIDE INDIA . THE ASSESSEE WOULD BE WELL AWARE OF ITS COMPETITORS IN THE INTERNATIONAL MA RKET AND THEIR FINANCIAL DAT A WOULD ALSO BE VERY MUCH AVAILABLE FOR COMPARISON FROM INTERNATIONAL DATA BASE . T RANSFER PRICING IS NOT AN ISSUE WHICH IS EXCLUSIVE TO THE INDIAN TAXATION LAWS. IT WAS , THEN PUT TO THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT AS THE ASSESSEE HAS GOT TWO DIFFERENT UNITS , ONE BEING THE MANUFACTURING DIVISION AND ONE DOING THE ENGINEERING SUPPORT SERVICES DIVISION , T HE CORRECT METHOD WOULD BE PROFIT SPLIT METHOD AND T HE AVERAGE ARMS LENGTH PRICE WAS LIABLE TO BE DETERMINED BY TAKING IN TO CONSIDERATION THE DATA IN RESPECT OF SIMILARLY CONDUCTED BUSINESSES AND IF POSSIBLE, SIMILAR LINE OF BUSINESS AS AVAILABLE IN THE INTERNATIONAL MARKET , I NSOFAR AS THE CLIENTS OF THE ASSESSEE BEING PES ARE ALSO IN THE INTERNATIONAL MARKET. TO THIS, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE DATA WOULD BE DIFFICULT TO OBTAIN AND PLACE BEFORE THE TRIBUNAL AND EVEN IF IT IS OBTAINED AND PLACED , THE SAME, IT WOULD HAVE T O BE VERIFIED BY THE TPO . TO THIS, DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT AS IT IS THE DUTY OF THE ASSESSEE TO PROVE THAT ITS TRANSACTIONS WITH THE ASSOCIATED ENTERPRISES ARE AT ARMS LENGTH IS ON THE ASSESSEE, THE ISSUE COULD BE RESTORED TO THE FILE O F THE TPO WITH DIRECTION TO THE ASSESSEE TO PRODUCE THE DATA BEFORE THE TPO FOR RE - ADJUDICATION . 9. WE HAVE CONSIDERED THE SUBMISSIONS. ADMITTEDLY, A PERUS A L OF THE TPOS ORDER AS ALSO THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) SHOW THAT THE COMPARABLE WHICH HAS BEEN ADOPTED BY THE TPO AND AS CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AS ALSO THE TWO COMPARABLE S, WHICH HAVE BEEN DISCARDED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ARE ALL DOING THE BUSINESS OF INFORMATION TECHNOLOGY SERVICES. INFORMATION TECHNOLOGY ENABLED SERVICES (ITES) ARE SPECIFIC TO EACH COMPANY . S OME ARE IN RELATION TO 8 ITA NO S . 162 , 223 & 224 /P A N/201 4 FINANCE, SOME ARE I N RELATION TO SOFTWARE WHICH ARE REQUIRED FOR RUNNING MACHINERY, SOME ARE IN RELATION TO STRUCTURAL DESIGNING . E ACH WOULD HAVE ITSELF OWN VARIATION IN RESPECT OF ITS SPECIALITY, SCOPE AND PROFITABILITY. IN THE PRESENT CASE, THE ASSESSEE IS FOLLOWING VERY SIMPLE METHOD OF PROFIT DETERMINATION. WHATEVER BE THE COST OF THE ASSESSEE , THE PROFIT PERCENTAGE IS 12% ON THAT COST. THE PROFIT PERCENTAGE IS FIXED. IT DOES NOT HAVE ANY RELATION TO QUANTUM OF WORK OR THE SPECIALITY OF THE EMPLOYEE OR TYPE OF SERVICE. WHATEVER BE THE COST INCURRED IN RESPECT OF THE SERVICE PROVIDED BY THE ASSESSEE TO ITS PE, THE ASSESSEE MARKS - UP THE SAME BY 12% BEING ITS PROFIT. ADMITTEDLY, THE ASSESSEE S NATURE OF BUSINESS IS NOT COMPARABLE WITH ANY BUSI NESS AS NONE SIMILAR IN NATURE BEING AVAIL A BL E IN INDIA. THE ASSESSEE ALSO ADMITS THAT IT I S NOT HOLDING MONOPOLY. SIMILAR BUSINESSES ARE AVAILABLE IN THE INTERNATIONAL MARKET, INSOFAR AS THE ASSESSEE IS PROVIDING THE SER V ICES TO ITS ASSOCIATED ENTER PRIS ES IN THE INTERNATIONAL MARKET , THERE IS ALSO NO CLAIM THAT THE ASSESSEE HAS PROVIDED SUCH SERVICES TO ANY PERSON, WHO IS NOT AN ASSOCIATED ENTERPRISE. THEREFORE, THE OTHER COMPANIES IN THE INTERNATIONAL FIELD , WHICH ARE DOING THE SIMILAR BUSINESS OF THE ASSESSEE IN RESPECT OF THE MANUFACTURING OF THE EQUIPM EN T OF WATER TREATMENT INDUSTR IES, SWIM M INGPOOL AND EFFLUENT WATER TREATMENT WOULD ALSO HAVE SUCH DIVISIONS OR BUSINESS MODELS . THE DATA OF SUCH COMPANIES WOULD ALSO BE AVAILABLE IN THE INTERNATIONAL DATA BAS E . IN THESE CIRCUMSTANCES , IN THE VIEW OF THE PROVISIONS OF SUB - RULE (3) OF RULE 10B OF THE INCOME - TAX RULE 1962 , THIS ISSUE FOR THE PURPOSE OF DETERMINING OF THE ARMS LENGTH PRICE IN RELATION TO THE TRANSACTIONS OF THE ASSESSEE WITH ITS ASSOCIATED ENTERPRISES IS RESTORED TO THE FILE OF THE TPO FOR RE - ADJUDICATION. THE ASSESSEE SHALL PLACE BEFORE THE TPO THE DATA BASE AT T.P. STUDY IN RESPECT OF THE SIMILAR BUSINESS FROM THE INTERNATIONAL DATA BASE AND THE COMPETITORS OF THE ASSE SSEES BUSINESS TO SHOW THAT THE ARMS LENGTH PRICE AS ADOPTED BY THE ASSESSEE IS FA I R AND DOES NOT CALL FOR ANY ADJUSTMENTS . THE SAME SHALL BE VERIFIED BY THE TPO. LIBERTY IS ALSO GRANTED TO THE TPO TO 9 ITA NO S . 162 , 223 & 224 /P A N/201 4 OBTAIN DATA INDEPENDENTLY AS IS NECESSARY FOR DETERMINING THE CORRECT ARMS LENGTH PRICE IN RESPECT OF THE ASSESSEES TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISES. ANY INFORMATION OR DATA OBTAINED BY THE TPO INDEPENDENTLY , SHALL BE PUT TO THE ASSESSEE FOR ITS REBUTTAL IN THE EVENT THAT THE TPO PROPOSES TO USE THE SAME AGAINST THE ASSESSEE. 10 . IN THE RESULT, BOTH THE APPEAL S OF THE REVENUE AND THE APPEAL OF THE ASSESSEE STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON TUESDAY , THE 03 RD DAY OF MAY , 201 6 AT GOA . S D / - S D / - (N.S.SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 03 RD MAY , 201 6 . VR/ - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE A) DCIT, CIRCLE - 1, MARGAO GOA. B) ACIT, CIRCLE - 1, MARGAO GOA. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI