M/s. Bobst India Pvt. Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 2231/PUN/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9491 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 15-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY B REDDY
• Keywords: Related party transaction; Transfer pricing; International transaction; Additional evidence; Wholly owned subsidiary; Difference of opinion
• Section: 92C; 143(3); 234B; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2231 /PUN/201 3 / ASSESSMENT YEAR : 20 09 - 10 M/S. BOBST INDIA PRIVATE LIMITED, PLOT NO. 82, 126 - 132, VILLAGE - KASAR AMBOLI, POST - AMBADVET, GH O TAVADE ROAD, TAL. - MULSHI, DISTT. PUNE 412108 PAN : AAACB7295F ....... / APPELLANT / V S. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), PUNE / RESPONDENT ASSESSEE BY : SHRI RAJENDRA AGIWAL REVENUE BY : S HRI VIJAY B. REDDY / DATE OF HEARING : 2 0 - 04 - 2017 / DATE OF PRONOUNCEMENT : 24 - 0 5 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ASSESSMENT ORDER DATED 31 - 10 - 2013 PASSED U/S. 143(3) R.W.S. 144C(13) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 2 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE COMPANY IS A 100% SUBSIDIARY OF BOBST GROUP SA, SWITZERLAND. BOBST GROUP IS SUPPLIER OF PRODUCTS AND SERVICES FOR FOLDING CARTON, CORRUGATED BOARD AND FLEXIBLE PACKAGING INDUSTRY. THE ASSESSEE COMPANY IS T HE LOCAL ARM OF BOBST GROUP HANDLING SALES, SERVICE AND TECHNICAL FUNCTIONS IN INDIA, SRI LANKA AND NEPAL. THE ASSESSEE PROVIDES WIDE RANGE OF SUPPORT SERVICES VIZ. INSTALLATION, CUSTOMER SUPPORT SERVICE ON BEHALF OF BOBST GROUP ENTITIES. THE ASSESSEE AL SO HAS EXPORT ORIENTED UNDERTAKING (EOU) WHICH IS ENGAGED IN MANUFACTURING OF MACHINE MODULES REQUIRED FOR PRINTING, P ACKAGING AND ANCILLARY TO P ACKAGING INDUSTRY. DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL , THE ASSESSEE FILED ITS RETU RN OF INCOME ON 02 - 11 - 2009 DECLARING LOSS OF RS.76,74,688/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE. DURING THE FINANCIAL YEAR 2008 - 09 , THE ASSESSEE HAD ENTERED INTO INTERNATIONAL TRANSACTIONS AGGREGATING TO RS.34.21 CRORES, TH EREFORE, REFERENCE U/S. 92CA(1) OF THE ACT WAS MADE TO THE TRANSFER PRICING OFFICER (TPO) FOR COMPUTATION OF ARMS LENGTH PRICE (ALP) IN RELATION TO THE INTERNATIONAL TRANSACTIONS UNDERTAKEN BY THE ASSESSEE. THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE WERE DIVIDED IN TWO SEGMENTS : (I) TRANSACTIONS RELATING TO MANUFACTURING OPERATIONS BY EOU. (II) TRANSACTIONS RELATING TO DOMESTIC OPERATIONS BY UNIT SET UP IN D OMESTIC T ARIFF A REA (DTA). 2.1 THE ASSESSEE A PPLIED TRANSACTIONAL NET MARGIN METHOD (TNMM) FOR BENCHMARKING THE TRANSACTIONS IN BOTH THE SEGMENTS. THE TPO ACCEPTED TNMM IN RESPECT OF INTERNATIONAL TRANSACTIONS CARRIED OUT BY EOU. HOWEVER, IN RESPECT OF UNIT IN DTA , THE TPO APPLIED INTERNAL 3 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 CUP. FU RTHER, THE TPO INCLUDED CERTAIN COMPANIES IN THE LIST OF COMPARABLES TO WHICH THE ASSESSEE STRONGLY OBJECTED. THE TPO MADE UPWARD ADJUSTMENT OF RS.1,84,59,800/ - IN RESPECT OF MANUFACTURING ACTIVITIES CARRIED OUT BY EOU AND PROPOSED ADDITION OF RS.6,55,51, 991/ - IN RESPECT OF INTERNATIONAL TRANSACTIONS RELATING TO SALES COMMISSION ON SALE OF MACHINES. AGGRIEVED BY THE ADDITIONS PROPOSED BY TPO, THE ASSESSEE FILED OBJECTION S BEFORE THE DISPUTE RESOLUTION PANEL (DRP). THE DRP VIDE DIRECTIONS DATED 30 - 08 - 2013 GRANTED PART RELIEF TO THE ASSESSEE BY RESTRICTING ADJUSTMENT IN RESPECT OF EOU MANUFACTURING ACTIVITIES TO RS.1,63,23,856/ - AND BY EXCLUDING SOME OF THE COMPANIES FROM F INAL LIST OF COMPARABLES. IN LINE WITH THE DIRECTIONS OF DRP, THE ASSESSING OFFICER FRAMED FINAL ASSESSMENT ORDER WHICH IS SUBJECT MATTER OF APPEAL. 3. THE ASSESSEE IN APPEAL HAS RAISED AS MANY AS 16 GROUNDS ASSAILING THE FINDINGS OF AUTHORITIES BELOW . THE LD. AR OF THE ASSESSEE AT THE OUTSET STATED AT THE BAR THAT HE WOULD NOT BE PRESSING GROUND NOS. 3, 6, 7, 9, 10 AND 12. A FTER PERUSAL OF GROUNDS OF APPEAL WE FIND THAT GROUND NO. 1 AND 2 ARE GENERAL IN NATURE AND HENCE, REQUIRE NO ADJUDICATION. THU S, THE GROUNDS FOR EFFECTIVE ADJUDICATION BY THE TRIBUNAL ARE AS UNDER : 4. INAPPROPRIATELY CONSIDERING ROLLATAINERS LIMITED AS COMPARABLE FOR AY 2009 - 10 WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF APPEAL, ERRED BY CONCLUDING THAT ROLLATAINERS LIMITED IS COMPARABLE TO THE APPELLANT AND HENCE SHOULD BE CONSIDERED WHILE COMPUTING THE OPERATING MARGINS OF COMPARABLE COMPANIES FOR ARRIVING AT THE ARM'S LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANSACTIONS PERTAINING TO MANUFACTURING OPERATIONS. FURTHER, ERRED BY NOT CONSIDERING THE CORRECT OPERATING MARGINS OF ROLLATAINERS LIMITED FOR FINANCIAL YEAR ('FY') 2008 - 0 9 . 4 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 5. INAPPROPRIATELY CONSIDERING STOVEC INDUSTRIES LIMITED AS COMPARABLE FOR AY 2009 - 10 WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF APPEAL, ERRE D BY CONCLUDING THAT STOVEC INDUSTRIES LIMITED IS COMPARABLE TO THE APPELLANT AND HENCE SHOULD BE CONSIDERED WHILE COMPUTING THE OPERATING MARGINS OF COMPARABLE COMPANIES FOR ARRIVING AT THE ARM'S LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANSACTIONS PERTAINING TO MANUFACTURING OPERATIONS. FURTHER, ERRED BY NOT CONSIDERING THE CORRECT OPERATING MARGINS OF STOVEC INDUSTRIES LIMITED FOR FINANCIAL YEAR 2008 - 09. 8. ERRONEOUSLY COMPUTING THE OPERATING MARGINS OF THE APPELLANT ERRED IN COMPUTING THE OPERATI NG MARGINS OF THE APPELLANT BY INCLUDING EXPENSES RECOVERED FROM BOBST GROUP ENTITIES (INCURRED ON THEIR BEHALF) IN THE OPERATING INCOME RATHER THAN APPROPRIATELY NETTING OFF THE SAME FROM THE RELEVANT EXPENSE HEAD TO WHICH THEY WERE DEBITED. 11. ERRONEOU S COMPARISON OF COMMISSION FROM MARKETING OF MACHINES WITH THE COMMISSION FROM MARKETING OF SPARES ERRED BY COMPARING THE INTERNATIONAL TRANSACTION PERTAINING TO RECEIPT OF COMMISSION FROM MARKETING OF MACHINES OF AES WITH THE INTERNATIONAL TRANSACTION PERTAINING TO RECEIPT OF COMMISSION FROM MARKETING OF SPARES I.E. CONTROLLED TRANSACTION OF THE APPELLANT ITSELF. 13. NON GRANT OF TAX DEDUCTED AT SOURCE ('TDS') CREDIT OF RS.4,44,934 ERRED IN GRANTING CREDIT FOR TDS AT RS. 4, 16,375 INSTEAD OF RS.8,61,309 AND CONSEQUENTIALLY ERRONEOUSLY LEVYING INTEREST UNDER SECTION 234B OF THE ACT. 14. ERRONEOUS LEVY OF INTEREST UNDER SECTION 234A OF THE ACT ERRED IN LEVYING INTEREST UNDER SECTION 234A OF THE ACT OF RS.2,33,046 WITHOUT APPRECIATING THAT THE APPELLANT HAD FILED RETURN WITHIN THE TIME LIMIT UNDER SECTION 139(1) OF THE ACT. 15. ERRONEOUS LEVY OF INTEREST UNDER SECTION 234B OF THE ACT WITHOUT PREJUDICE TO THE GROUNDS ABOVE, IF THE TRANSFER PRICING ADJUSTMENT IS SUSTAINED THEN THE LEARNED AO HAS ERRED IN LEVYING INTEREST UNDER SECTION 234B OF THE ACT, WITHOUT CONSIDERING THE FACT THAT THE ADDITION ON ACCOUNT OF TRANSFER PRICING ADJUSTMEN T IS 5 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 DUE TO DIFFERENCE OF OPINION AND AS AT THE DUE DATE OF PAYMENT OF ADVANCE TAX BY NO MEANS THE APPELLANT COULD HAVE ESTIMATED SUCH ADJUSTMENTS AND CONSEQUENTIAL TAX ON SUCH ADJUSTMENT. 16. ERRONEOUS LEVY OF PENALTY UNDER SECTION 271(1)( C) OF THE ACT WITHOUT PREJUDICE TO THE GROUNDS ABOVE, IF THE TRANSFER PRICING ADJUSTMENT IS SUSTAINED THEN THE LEARNED A O HAS ERRED IN PROPOSING TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT, WITHOUT CONSIDERING THE FACT THAT ADJUSTMENT TO TRANSFER PRICE IS JUST O N ACCOUNT OF DIFFERENCE OF OPINION AND CONSEQUENTLY RESULTED IN AN ADJUSTMENT TO INCOME. 4. SHRI RAJENDRA AGIWAL APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE FACTS IN THE PRESENT ASSESSMENT YEAR ARE IDENTICAL TO THE FACTS IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2008 - 09. THE ASSESSEE HAD ASSAILED THE FINDINGS OF DRP FOR ASSESSMENT YEAR 2008 - 09 BEFORE THE TRIBUNAL IN ITA NO. 2090/PUN/2012. THE TRIBUNAL VIDE ORDER DATED 03 - 02 - 2017 ACCEPTED THE CONTENTIONS RAISED BY THE ASSESSEE IN RESP ECT OF GROUNDS WHICH ARE IDENTICAL TO THE GROUNDS NO. 4, 5, 8, 11 AND 13 RAISED IN THE PRESENT APPEAL BY ASSESSEE . 4.1 THE LD. AR SUBMITTED THAT IN GROUND NO. 4 THE ASSESSEE HAS ASSAILED INCLUSION OF ROLLATAINERS LIMITED AS COMPARABLE . THE ASSESSEE OBJ ECTED TO INCLUSION OF SAID COMPANY IN THE LIST OF COMPARABLES ON ACCOUNT OF RELATED PARTY TRANSACTIONS, THE SAID COMPANY BEING A SICK COMPANY AND DIFFERENCE IN THE FINANCIAL YEAR. THE LD. AR REFERRED TO THE AUDITORS REPORT OF ROLLATAINERS LIMITED AT PAGE 137 OF THE PAPER BOOK. THE LD. AR POINTED THAT IT HAS BEEN CATEGORICALLY MENTIONED IN CLAUSE (X) OF THE AUDITORS REPORT THAT THE ENTIRE NET WEALTH OF THE COMPANY HAS ERODED AND THE COMPANY HAS BEEN DECLARED SICK IN TERMS OF S ECTION 3(1)(O) OF SICK INDUS TRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985 BY THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR) ON 27 TH 6 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 JULY 2006 AND A REHABILITATION SCHEME HAS BEEN APPROVED IN RESPECT OF SAID COMPANY ON 15 - 05 - 2007. THE LD. AR REFERRING TO THE FINANCIAL RESULTS OF THE COMPANY FOR THE FINANCIAL Y EAR ENDING ON 30 - 09 - 2009 SUBMITTED THAT THE ROLLATAINERS LIMITED IS CONTINUOUS LOSS MAKING COMPANY AND HENCE, CANNOT BE CONSIDERED AS COMPARABLE. THE LD. AR ASSERTED THAT SINCE, THE F INANCIAL Y EAR OF THE SAID COMP ANY ENDS ON 30 TH SEPTEMBER THE SAID COMPANY CANNOT BE CONSIDERED AS COMPARABLE DUE TO DIFFERENCE IN THE F INANCIAL Y EAR. THE FINANCIAL YEAR OF ASSESSEE COMPANY ENDS ON 31 ST MARCH . THE LD. AR FURTHER POINTED THAT RELATED PARTY TRANSACTIONS OF ROLLATAINERS LIMITED IS MORE THAN 40% , THEREFORE, THE SAID COMPANY IS NOT A GOOD COMPARABLE AND SHOULD BE EXCLUDED FROM THE LIST OF COMPARABLES. THE LD. AR SUBMITTED T HAT THE CO - ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESS MENT YEAR I.E. ASSESSMENT YEAR 2008 - 09 IN ITA NO. 2090/PUN/2012 (SUPRA) HAD EXCLUDED ROLLATAINERS LIMITED FROM THE LIST OF COMPARABLES ON ACCOUNT OF SIGNIFICANT RELATED PARTY TRANSACTIONS, DIFFERENT FINANCIAL YEAR AND NEGATIVE WOR TH FOR THREE CONSECUTIVE A SSESSMENT YEARS. 4.2 IN RESPECT OF GROUND NO. 5 , THE LD. AR SUBMITTED THAT THE AUTHORITIES BELOW HAVE ERRED IN INCLUDING STOVEC INDUSTRIES LIMITED IN THE LIST OF COMPARABLES. THE LD. AR CONTENDED THAT THE AFORESAID COMPANY IS NOT A COMPARABLE AS STOVEC I NDUSTRIES LIMITED HAS DIFFERENT FINANCIAL YEAR AND ALSO FAILS ON RPT FILTER. THE LD. AR REFERRED TO THE AUDIT REPORT OF THE STOVEC INDUSTRIES LIMITED AT PAGE 160 OF THE PAPER BOOK TO SHOW THAT THE FINANCIAL YEAR OF THE SAID COMPANY ENDS ON 31 ST DECEMBER , WHEREAS THE FINANCIAL YEAR OF THE ASSESSEE IS FROM 1 ST APRIL TO 31 ST MARCH. THE LD. AR SUBMITTED THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. PTC SOFTWARE (I) PVT. 7 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 LTD. IN INCOME TAX APPEAL NO. 732 OF 2014 DECIDED ON 26 TH SEPTEMBER, 2016 HAS HELD THAT THE COMPANY WITH A DIFFERENT FINANCIAL YEAR SHOULD NOT BE TREATED AS A COMPARABLE. THE LD. AR IN SUPPORT OF HIS CONTENTIONS THAT THE COMPANY WITH HIGHER RELATED PARTY TRANSACTIONS SHOULD BE EXCLUDED FROM THE LIST OF COMPAR ABLES DRAWS SUPPORT FROM THE ORDER OF TRIBUNAL IN THE CASE OF M/S. SYMANTEC SOFTWARE SOLUTIONS PRIVATE LIMITED VS. ASSISTANT COMMISSIONER OF INCOME TAX IN ITA NO. 8673/MUM/2011 FOR THE ASSESSMENT YEAR 2007 - 08 DECIDED ON 27 - 06 - 2012. THE LD. AR CONTENDED T HAT THE TPO HAS ERRED IN REJECTING THE OBJECTIONS OF THE ASSESSEE WITH RESPECT TO APPLYING RPT FILTER IN THE CASE OF STOVEC INDUSTRIES LIMITED. THE ASSESSEE HAD APPLIED RPT FILTER ON SEGMENTAL BASIS , A CCORDING TO WHICH THE RELATED PARTY TRANSACTIONS OF TH E STOVEC INDUSTRIES LIMITED WERE MORE THAN 29% . W HEREAS, THE TPO APPLIED RPT FILTER ON THE TOTAL TURNOVER. 4.3 THE LD. AR CONTENDED THAT IF ROLLATAINERS LIMITED AND STOVEC INDUSTRIES LIMITED ARE EXCLUDED FROM THE LIST OF COMPARABLES , THE ENTIRE TP ADJU STMENT IN RESPECT OF MANUFACTURING SEGMENT WILL BECOME NIL. 4.4 IN RESPECT OF GROUND NOS. 8, 11 AND 13 RAISED IN THE GROUNDS OF APPEAL , THE LD. AR SUBMITTED THAT THE ISSUES RAISED IN SAID GROUNDS ARE IDENTICAL TO THE ISSUES RAISED BY THE ASSESSEE IN GRO UND NOS. 9, 12 AND 14, RESPECTIVELY IN APPEAL FOR ASSESSMENT YEAR 2008 - 09. EXCEPT FOR THE AMOUNTS , THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES. THE TRIBUNAL AFTER EXAMINING THE FACTS HAS ALLOWED GROUND NOS. 9 AND 12 IN THE APPEAL OF THE ASSESSEE FO R ASSESSMENT YEAR 2008 - 09. IN RESPECT OF GROUND NO. 14 THE TRIBUNAL HAS REMITTED THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO VERIFY THE RECORDS AND GIVE APPROPRIATE CREDIT FOR THE TDS. 8 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 4.5 IN RESPECT OF GROUND 14 , THE LD. AR SUBM ITTED THAT INTEREST U/S. 234 A HAS BEEN LEVIED WITHOUT VERIFYING THE FACT THAT THE ASSESSEE HAS FILED RETURN OF INCOME WITHIN THE TIME LIMIT SPECIFIED U/S. 139(1) OF THE ACT . S INCE THERE HAS BEEN NO DELAY IN FILING OF RETURN OF INCOME, INTEREST U/S. 234A I S NOT LEVIABLE. 5. ON THE OTHER HAND SHRI VIJAY B. REDDY REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF AUTHORITIES BELOW. THE LD. DR SUBMITTED THAT IN RESPECT OF STOVEC INDUSTRIES LIMITED THE ASSESSEE FOR THE FIRST TIME HAS RAISED OB JECTION WITH REGARD TO DIFFERENCE IN FINANCIAL YEARS. BEFORE THE TPO AND DRP, THE ASSESSEE HAD SOUGHT EXCLUSION OF STOVEC INDUSTRIES LIMITED ON ACCOUNT OF RPT FILTER. THE ASSESSEE HAD APPLIED RPT FILTER ON SEGMENTAL BASIS , WHEREAS THE TPO AND DRP HAD APP LIED RPT FILTER ON TOTAL TURNOVER. IF RPT FILTER IS APPLIED ON TOTAL TURNOVER STOVEC INDUSTRIES LIMITED WOULD VERY MUCH FALL WITHIN THE RANGE FOR INCLUSION IN THE LIST OF COMPARABLES. IN RESPECT OF OTHER GROUNDS RAISED BY THE ASSESSEE , THE LD. DR FAIRLY ADMITTED THAT THE ISSUE RAISED IN THE PRESENT APPEAL ARE SIMILAR TO THE ISSUES THAT HAVE BEEN CONSIDERED BY THE TRIBUNAL IN THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2008 - 09. 6. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . WE HAVE ALSO CONSIDERED THE DOCUMENTS AND THE DECISIONS REFERRED TO BY THE LD. AR DURING THE COURSE OF MAKING SUBMISSIONS. THE GROUND NOS. 1 AND 2 ARE GENERAL IN NATURE, HENCE, REQUIRE NO ADJUDI CATION. THE LD. AR OF THE ASSESSEE HAS STATED AT THE BAR, THAT HE IS NOT PRESSING GROUND NOS. 3, 6, 7, 9, 10 AND 12 RAISED IN THE APPEAL. THUS, IN VIEW OF THE 9 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 STATEMENT OF LD. AR, AFOREMENTIONED GROUNDS RAISED IN THE APPEAL ARE DISMISSED AS NOT PRESSED. 7. IN GROUND NO. 4, THE ASSESSEE HAS ASSAILED INCLUSION OF ROLLATAINERS LIMITED IN THE LIST OF COMPARABLES. THE ASSESSEE HAS SOUGHT EXCLUSION OF SAID COMPANY FROM THE LIST OF COMPARABLES ON ACCOUNT OF : (I) HIGH RPT ; (II) BEING SICK COMPANY ; AND (III) D IFFEREN CE IN FINANCIAL YEAR. WE FIND THAT THE ASSESSEE IN ITS APPEAL BEFORE THE TRIBUNAL FOR ASSESSMENT YEAR 2008 - 09 HAD ASSAILED THE INCLUSION OF ROLLATAINERS LIMITED IN THE LIST OF COMPARABLES. THE TRIBUNAL AFTER CONSIDERING THE FACTS AND VARIOUS DECIS IONS DIRECTED THE EXCLUSION OF ROLLATAINERS LIMITED ON ACCOUNT OF S IGNIFICANT RELATED PARTY TRANSACTION S , DIFFERENT FINANCIAL YEAR AND COMPANY HAVING NEGATIVE WORTH FOR THREE CONSECUTIVE ASSESSMENT YEARS. 8. THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE F INANCIAL RESULTS OF THE ROLLATAINERS LIMITED AT PAGE 141 OF THE PAPER BOOK. A PERUSAL OF THE AUDIT REPORT AND FINANCIAL RESULTS OF THE COMPANY FOR THE FINANCIAL YEAR 2008 - 09 SHOW THAT THE SAID COMPANY IS HAVING NEGATIVE PROFITS. MOREOVER, THE FINANCIAL Y EAR O F THE SAID COMPANY IS ENDING ON 30 TH SEPTEMBER , WHEREAS THE FINANCIAL YEAR OF THE ASSESSEE ENDS ON 31 ST MARCH. IT IS EVIDENT FROM THE RECORDS THAT ROLLATAINERS LIMITED IS HAVING DIFFERENT FINANCIAL YEAR AND IS HAVING NEGATIVE NET WORTH FOR THE THREE CONSECUTIVE ASSESSMENT YEARS. AS FAR AS RELATED PARTY TRANSACTIONS ARE CONCERNED , THE LD. AR OF THE ASSESSEE HAS POINTED THAT THE COMPANY IS HAVING RPT OF MORE THAN 40%. THIS FACT HAS BEEN RECORDED BY THE TPO AS WELL AS DRP. WITHOUT CONTROVERTING THE SUBMISSIONS OF THE ASSESSEE QUA SIGNIFICANT RPT BOTH 10 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 THE AUTHORITIES BELOW HAVE REJECTED THE SAME WITHOUT ASSIGNING ANY REASON. THUS, IN VIEW OF THE FACTS OF THE CASE AND DOCUMENTS ON RECORD WE ARE OF THE VIEW T HAT ROLLATAINERS LIMITED CANNOT BE CONSIDERED AS A COMPARABLE ON THE ACCOUNT OF HIGH RPT, DIFFERENT FINANCIAL YEAR AND NEGATIVE NET WORTH FOR THREE CONSECUTIVE ASSESSMENT YEARS. TH US, THE GROUND NO. 4 RAISED IN THE APPEAL BY THE ASSESSEE IS ALLOWED. 9. IN GROUND NO. 5 THE ASSESSEE HAS ASSAILED INCLUSION OF STOVEC INDUSTRIES LIMITED AS COMPARABLE ON ACCOUNT OF DIFFERENCE IN FINANCIAL YEAR AND HIGH R ELATED P ARTY T RANSACTIONS. THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE AUDITORS REPORT AND FINANCIAL RESUL TS OF STOVEC INDUSTRIES LIMITED AT PAGES 160 TO 195 OF THE PAPER BOOK. A PERUSAL OF THE SAME REVEAL THAT FINANCIAL Y EAR OF THE COMPANY ENDS 31 ST DECEMBER , WHERES, THE F INANCIAL Y EAR OF THE ASSESSEE IS FROM 1 ST APRIL TO 31 ST MARCH. THE DEPARTMENT HAS STRONGLY OBJECTED TO THIS NEW PLEA RAISED BY THE ASSESSEE FOR EXCLUDING STOVEC INDUSTRIES LIMITED FROM THE LIST OF COMPARABLES. UNDISPUTEDLY, THE ASSESSEE HAS TAKEN OBJECTION QUA DIFFERENT FINANCIAL YEAR OF STOVEC INDUSTRIES LIMITED FOR THE FIRST TIME BEF ORE THE TRIBUNAL. WE ARE OF THE CONSIDERED VIEW THAT ALTHOUGH THE ASSESSEE HAS TAKEN THIS OBJECTION FOR THE FIRST TIME BEFORE THE TRIBUNAL , NEVERTHELESS THE FACT OF DIFFEREN CE IN FINANCIAL YEAR WAS ALWAYS IN EXISTENCE AND IS EVIDENT FROM DOCUMENTS ALREADY ON RECORD. THE ASSESSEE HAS NOT TAKEN A NEW PLEA BY FILING ANY ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL. THE FINANCIAL RESULTS OF STOVEC INDUSTRIES LIMITED WERE FILED BY THE ASSESSEE IN ITS TP STUDY AND THE ASSESSEE HAS HIGHLIGHTED THE DIFFERENCE IN FINA NCIAL YEAR FROM THE AUDITORS REPORT AND THE BALANCE SHEET OF THE SAID COMPANY. THEREFORE, WE DO NOT FIND 11 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 ANY MERIT IN THE OBJECTION RAISED BY THE DEPARTMENT. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. PTC SOFTWARE (I) PV T. LTD. (SUPRA) HAS HELD THAT IN TERMS OF PROVISIONS OF RULE 10B(4) THE DATA TO BE USED FOR COMPARABILITY ANALYSIS SHOULD BE OF THE SAME FINANCIAL YEAR IN WHICH THE INTERNATIONAL TRANSACTIONS WERE ENTERED INTO BY THE TESTED PARTY. THE MANDATE OF RULE 10B CANNOT BE IGNORED EVEN IF THERE IS DIFFERENCE OF THREE MONTHS. 10. AS FAR AS DETERMINATION OF RELATED PARTY TRANSACTIONS IS CONCERNED WE CONCUR WITH THE OBSERVATIONS OF DRP THAT NOMINATOR AND DENOMINATOR SHOULD BE THE SAME NATURE. IF THE RPT IS COMPUTE D BY CONSIDERING RPT OF SALE S AND EXPENDITURE THEN THE DENOMINATOR SHOULD ALSO BE AGGREGATE OF TOTAL SALE AND EXPENDITURE. DE HORS , RPT FILTER STOVEC INDUSTRIES LIMITED IS LIABLE TO BE EXCLUDED FROM THE LIST OF COMPARABLES ON ACCOUNT OF DIFFEREN CE IN FINA NCIAL YEAR. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO EXCLUDE STOVEC INDUSTRIES LIMITED FROM THE LIST OF COMPARABLES. THUS, IN VIEW OF OUR ABOVE FINDINGS GROUND NO. 5 RAISED IN APPEAL BY THE ASSESSEE IS ALLOWED. 11. IN GROUND NO. 8 , THE ASSESSEE HAS ASSAILED COMPUTATION OF OPERATING MARGINS BY INCLUDING EXPENSES RECOVERED FROM BOBST GROUP ENTITIES. WE FIND THAT IDENTICAL GROUND WAS RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL IN APPEAL FOR ASSESSMENT YEAR 2008 - 09. THE TRIBUNAL ACCEPTED THE CONTEN TIONS OF THE ASSESSEE BY OBSERVING AS UNDER : 49. AFTER HEARING BOTH THE SIDES, WE FIND THE ASSESSEE HAS RECOVERED CERTAIN PART OF ITS EXPENSES FROM ITS AES WHICH IS ATTRIBUTABLE TO THE AES AND THUS DEBITED THE NET AMOUNT OF THE EXPENDITURE TO THE PROFIT AND LOSS ACCOUNT. IT IS THE CASE OF THE TPO THA T THE ASSESSEE SHOULD HAVE SEPARATELY SHOWN THE REIMBURSEMENT FROM THE AES AND THE EXPENDITURE 12 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 INCURRED AND NOT THE NET AMOUNT. IT IS THE CASE OF THE LD. COUNSEL FOR THE ASSESSEE THAT THERE IS NO IMPACT IN THE NET PROFIT SINCE THE ASSESSEE HAS TAKEN THE NE T EXPENDITURE AS COST. 50. THE ASSESSEE HAS FILED A CHART SHOWING COMPUTATION OF OPERATING MARGIN FROM EOU OPERATIONS AND DOMESTIC OPERATIONS AND THE WORKING FOR IMPACT OF OPERATING MARGIN OF THE ASSESSEE COMPANY FROM EOU AND DTA OPERATIONS INCLUDING REC OVERY OF EXPENSES THAT THERE IS ABSOLUTELY NO IMPACT IN THE OVERALL PROFITABILITY. IN OUR OPINION, WHEN THE ASSESSEE HAS SHOWN THE NET EXPENDITURE AFTER CREDITING THE RECOVERIES FROM THE AE AS THE PART OF THE EXPENDITURE IT DOES NOT MAKE ANY DIFFERENCE IF THE RECOVERY IS SHOWN SEPARATELY IN THE CREDIT SIDE AND THE GROSS EXPENDITURE IS SHOWN IN THE DEBIT SIDE. NET RESULT WILL BE THE SAME. WE, THEREFORE, FIND MERIT IN THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE TPO HAS ERRED IN COMPUTING THE OPERATI NG MARGIN OF THE ASSESSEE BY INCLUDING EXPENSES RECOVERED FROM BOBST GROUP ENTITIES AS THE OPERATING INCOME RATHER THAN PROPERLY NETTING OFF THE SAME FROM THE RELEVANT EXPENSES HEAD TO WHICH THEY HAVE BEEN DEBITED. GROUND OF APPEAL NO.9 RAISED BY THE ASSES SEE IS ACCORDINGLY ALLOWED. THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THE FINDINGS OF CO - ORDINATE BENCH FOR ASSESSMENT YEAR 2008 - 09 ON THIS ISSUE. ACCORDINGLY, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE IN ASSESSMENT YEAR 2009 - 10 FOR SIMILAR REASONS. WE HOLD AND DIRECT ACCORDINGLY. 1 2 . IN GROUND NO. 11 THE ASSESSEE HAS IMPUGNED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN MAKING ERRONEOUS COMPARISON OF COMMISSION FROM MARKETING OF MACHINE S WITH THE COMMISSION FROM MARKETING OF SPARES . WE FIND THAT SIMILAR GROUND WAS RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL IN ITS APPEAL FOR ASSESSMENT YEAR 2008 - 09. THE TRIBUNAL DECIDED THIS ISSUE BY FOLLOWING THE DECISION IN ITA NO. 1295/PN/2011 FO R THE ASSESSMENT YEAR 2007 - 08 DECIDED ON 28 - 02 - 2013 IN ASSESSEES OWN CASE. THE RELEVANT EXTRACT OF THE FINDINGS OF TRIBUNAL ARE AS UNDER : 13 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 59. AFTER HEARING BOTH SIDES WE FIND IDENTICAL GROUND WAS RAISED BY THE ASSESSEE IN ITS OWN CASE FOR A.Y. 2007 - 08 WHICH READS AS UNDER : 5. ERRONEOUS COMPARISON OF COMMISSION ON MARKETING OF MACHINES AND COMMISSION ON MARKETING OF SPARES. ERRED IN COMPARING THE INTERNATIONAL TRANSACTION PERTAINING TO RECEIPT OF COMMISSION FOR MARKETING OF BOBST GROUP MACHINES WITH THE INTERNATIONAL TRANSACTION PERTAINING TO RECEIPT OF COMMISSION FOR MARKETING OF SPARES, I.E. CONTROLLED TRANSACTIONS OF THE A PPELLANT ITSELF. 60. WE FIND THE TRIBUNAL IN ITA NO.1295/PN/2011 ORDER DATED 28 - 02 - 2013 FOR A.Y. 2007 - 08 HAS DISCUSSED THE ISSUE FROM PARA 7.3 ONWARDS AND HAS OBSERVED AS UNDER : 7.3 TPO/AO OBSERVED THAT ASSESSEE IS RECEIVING COMMISSION AT THE RATE O F 15% FROM THE AES FOR MARKETING OF SPARES IN INDIA WHILE THE RATE OF COMMISSION FOR MARKETING THE MACHINERIES OF AES, THE STANDS AT @ 5%. IN THE INSTANT CASE WHEN THE AGGREGATED APPROACH OF BENCHMARKING AS DONE BY THE ASSESSEE HAS NOT BEEN FOUND TO BE ACC EPTABLE AND WHEN THE STAND ALONE PROFITABILITY FROM THIS INTERNATIONAL TRANSACTION HAS NOT BEEN ABLE TO BE WORKED OUT FOR THE REASON THAT THE RELATED COSTS ARE NOT IDENTIFIABLE BY THE ASSESSEE AND FURTHER THERE CANNOT BE ANY RELIABLE UNCONTROLLED TRANSACTI ON AVAILABLE IN THE PUBLIC DOMAIN, IT COMPELLED TPO TO LOOK INTO THE DATA AND INFORMATION THAT IS AVAILABLE. UNDER THE CIRCUMSTANCES, DRP HELD THAT TPO WAS JUSTIFIED IN COMPARING THE INTERNATIONAL TRANSACTION OF BOBST INDIA WITH A CONTROLLED TRANSACTION OF BOBST INDIA ITSELF. 7.4 BEFORE US LD. AR REITERATED THE SUBMISSION RAISED BEFORE TPO/DRP AND ALSO RAISED ADDITIONAL CONTENTION TO OPPOSE THE FINDING OF DRP ON ISSUE WHILE ON OTHER HAND SUPPORTED THE ORDER OF TPO WHICH WAS UPHELD BY DRP. ALL THESE RIVAL CONTENTIONS OF BOTH THE PARTIES ON THE ISSUE AT HAND ARE BEING DEALT IN SUCCEEDING SUB PARA. 7.5 THE STAND OF ASSESSEE HAS BEEN THAT IT IS INAPPROPRIATE TO USE CONTROLLED TRANSACTIONS FOR BENCH MARKING. BASED ON THE INDIAN TP REGULATIONS INCLUDING RULE 1 0A(A), RULE 10B(1), RULE 10B(2),RULE 10B (3) AND RULE 10B(4), FOLLOWING POINTS NEED CONSIDERATION: A. TRANSACTIONS ENTERED INTO BY TESTED PARTY SHOULD BE COMPARED WITH UNCONTROLLED TRANSACTIONS; AND B. UNCONTROLLED TRANSACTIONS DO NOT INCLUDE TRANSACTI ONS BETWEEN ASSOCIATED ENTERPRISES. INDIAN TP REGULATIONS PRESCRIBE THAT MOST APPROPRIATE METHOD HAS TO BE IDENTIFIED FOR BENCHMARKING AN INTERNATIONAL TRANSACTION AND COMPARISON HAS TO BE DONE WITH UNCONTROLLED TRANSACTIONS AND NOT CONTROLLED 14 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 TRANSACTIONS TO ARRIVE AT THE ARM'S LENGTH PRICE. ACCORDINGLY, THE APPROACH OF BENCHMARKING THE TRANSACTION PERTAINING TO RECEIPT OF COMMISSION FROM MARKETING OF MACHINES BY COMPARING THE SAME WITH CONTROLLED TRANSACTION OF APPELLANT ITSELF DOES NOT FALL U NDER ANY OF THE METHODS PRESCRIBED UNDER THE PROVISIONS OF SECTION 92C OF THE ACT. IT IS CONTRARY TO INDIAN TP REGULATIONS AND NOT ACCEPTABLE UNDER THE INDIAN TP REGULATIONS. SIMILAR VIEW HAS BEEN TAKEN BY ITAT IN CASE OF SKODA AUTO INDIA PVT. LTD. VS. ACI T (122 ITJ 699), M.S.S. INDIA PVT. LTD. (123 ITJ 657) AND BECHTEL INDIA PVT. LTD. VS. DCIT (136 ITJ 212). ITAT IN THE ABOVE MENTIONED DECISIONS VIEW WAS TAKEN THAT FOR DETERMINING THE ARM'S LENGTH PRICE AND BENCHMARKING INTERNATIONAL TRANSACTIONS OF AN ASS ESSEE, REFERENCE SHOULD BE MADE ONLY TO UNCONTROLLED TRANSACTIONS. HENCE, BENCHMARKING THE INTERNATIONAL TRANSACTION PERTAINING TO RECEIPT OF COMMISSION USING INTERNATIONAL TRANSACTION OF APPELLANT ITSELF FOR COMPARISON IS NOT VALID AS PER THE INDIAN TRANS FER PRICING REGULATIONS. AS PER PARA 2.3 AND 2.6 OF OECD TP GUIDELINES IT IS OBVIOUS THAT FOR APPLICATION OF ANY TP METHOD FOR BENCHMARKING INTERNATIONAL TRANSACTIONS, COMPARISON HAS TO BE WITH UNCONTROLLED TRANSACTIONS. ACCORDING TO US TPO WAS NOT JUSTIFI ED TO NOT TO TAKE THIS ASPECT INTO CONSIDERATION WHILE DEALING ISSUE AT HAND. 7.7 NEXT ARGUMENT ON BEHALF OF ASSESSEE IS THAT FUNCTIONS INVOLVED IN MARKETING OF SPARES ARE MORE THAN FUNCTIONS INVOLVED IN MARKETING OF MACHINES FOR SALE OF MACHINES, THE NU MBER OF TRANSACTIONS AND NUMBER OF NEGOTIATIONS ARE LESS AS COMPARED TO SALE OF SPARES WHERE SIGNIFICANT EFFORTS ARE REQUIRED TO BE TAKEN ON A DAY TO DAY BASIS. IT IS DIFFICULT TO CONVINCE THE CUSTOMERS TO KEEP SAFETY STOCK OF SPARE PARTS AS IT INVOLVES CA RRYING COST AND BLOCKAGE OF FUNDS. THE CUSTOMERS HAVE TENDENCY TO PROCURE THE SPARES PURCHASED THROUGH LOCAL SUPPLIERS/ FABRICATORS ETC AS IT SAVES A LOT OF TIME AS COMPARED TO IMPORTING THESE PARTS AND IS ALSO COST EFFECTIVE AND THEREFORE CONTINUOUS MONIT ORING / FOLLOW - UP / LIAISONING WITH THE CUSTOMERS IS REQUIRED FOR SALE OF SPARES, ACCORDING TO ASSESSEE, THE MACHINES OF BOBST GROUP ARE SOLD IN THE MARKET BY ITS BRAND NAME AND QUALITY THAT IT PROVIDES. HOWEVER, IN CASE OF SPARES, CUSTOMERS HAVE AN OPTION TO PURCHASE SPARES LOCALLY OF TOTALLY DIFFERENT BRAND. FURTHER, DUE TO PAUCITY OF TIME THE CUSTOMERS PREFER TAKING SPARES FROM LOCAL SUPPLIERS AND THEY ALSO DO NOT PREFER TO MAINTAIN A SAFETY STOCK EVEN AFTER CONTINUOUS SUGGESTIONS BY THE APPELLANT REGARD ING THE SAME. ACCORDING TO US TPO / AO HAVE NOT LOOKED INTO THIS PRACTICAL/PARTICULAR ASPECT OF ASSESSEES BUSINESS WHILE DEALING ISSUE AT HAND WHICH IS NOT JUSTIFIED. 7.8 NEXT ARGUMENT OF ASSESSEE IS THAT BOBST GROUP ENTITIES SALE SPARES ON CREDIT BASIS TO CUSTOMERS IN INDIA WHEREAS MACHINES ARE SOLD ONLY WHEN LETTER OF CREDIT IS OPENED BY THE CUSTOMERS. ACCORDINGLY, FOR EARNING COMMISSION INCOME VIDE MARKETING OF SPARES, THE APPELLANT IS REQUIRED TO 15 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 INCUR ADDITIONAL RECOVERY COSTS FOR ASSISTING BOBST GR OUP ENTITIES IN RECOVERING THE PAYMENTS FROM CUSTOMERS; THIS ACTIVITY IS NOT INVOLVED IN CASE OF EARNING COMMISSION INCOME FROM MARKETING OF MACHINES AS THE PAYMENTS ARE RECEIVED IN ADVANCE. THE PARAMETERS DEMONSTRATING THE FACT THAT FUNCTIONS INVOLVED IN SALE OF SPARES ARE MUCH MORE ARDUOUS AS COMPARED TO THE FUNCTIONS INVOLVED IN SALE OF MACHINES. ACCORDINGLY, COMMISSION ON SALE OF SPARES SHOULD BE HIGHER THAN THE COMMISSION ON SALE OF MACHINES. THIS OBJECTIVE ASPECT HAS BEEN IGNORED BY TPO/AO. MOREOVER, THE QUANTUM OF SALE OF MACHINES AND SALE OF SPARE PARTS ALSO BEEN IGNORED. IN VIEW OF THE ABOVE, WE FOUND THAT THE FUNCTIONS INVOLVED IN MARKETING OF SPARES ARE MUCH MORE ARDUOUS AS COMPARED TO FUNCTIONS INVOLVED IN MARKETING OF MACHINES AND ACCORDINGLY, H IGHER COMMISSION ON MARKETING OF SPARES AS COMPARED TO THE COMMISSION IN MARKETING OF MACHINES IS JUSTIFIED. 7.9 NEXT ARGUMENT OF ASSESSEE IS THAT MARKET RESEARCH STUDIES AND TECHNICAL PUBLICATIONS SUGGEST THE GENERAL INDUSTRY TREND THAT COMMISSION ON MA RKETING OF SPARES IS HIGHER AS COMPARED TO COMMISSION ON MARKETING OF MACHINES. WE DO NOT ACCEPT THIS ARGUMENT OF ASSESSEE IN ISOLATION. THIS IS SUBJECTIVE ASPECT WHICH HAS TO BE APPRECIATED IN ITS FACTS AND CIRCUMSTANCES. WITHOUT PREJUDICE TO ABOVE WE FIN D THAT ACCORDING TO TPO/AO HAS NOT GIVEN COGENT REASONING FOR REJECTING TNMM IDENTIFIED BY THE APPELLANT AS THE MOST APPROPRIATE METHOD FOR BENCHMARKING ITS INTERNATIONAL TRANSACTIONS PERTAINING TO DOMESTIC OPERATIONS. THE APPROACH ADOPTED BY THE TPO I.E. USING CONTROLLED TRANSACTION OF THE APPELLANT ITSELF (RECEIPT OF COMMISSION ON MARKETING OF SPARES) FOR BENCHMARKING THE INTERNATIONAL TRANSACTION PERTAINING TO RECEIPT OF COMMISSION FOR MARKETING OF MACHINES IS NOT APPROPRIATE AS PER THE INDIAN TP REGULAT IONS. ACCORDINGLY INTERNATIONAL TRANSACTION OF THE APPELLANT PERTAINING TO RECEIPT OF COMMISSION FOR MARKETING OF MACHINES BENCHMARKED BY ASSESSEE BY AGGREGATING THE SAME WITH OTHER INTERNATIONAL TRANSACTIONS PERTAINING TO DOMESTIC OPERATIONS USING TNMM SH OULD NOT BE REJECTED. WE HOLD SO. 61. SINCE THE TRIBUNAL HAS ALREADY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE ON THIS ISSUE, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT BEFORE US BY THE LD. DEPARTMENTAL REPRESENTATIVE, GROUND RAISED BY THE ASSESSEE ON THIS ISSUE IS ALLOWED. SINCE, NO CHANGE IN FACTS AND CIRCUMSTANCES HAVE BEEN POINTED BY THE LD. D R DURING ASSESSMENT YEAR 2009 - 10, WE SEE NO REASON TO TAKE A CONTRARY VIEW. FOLLOWING THE ORDER OF TRIBUNAL IN EARLIER 16 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 ASSESSMENT YEARS, WE ALLOW GROUND NO. 11 RAISED IN THE APPEAL BY THE ASSESSEE. 1 3 . IN GROUND NO. 13 THE ASSESSEE HAS ASSAILED THE FINDINGS OF AUTHORITIES BELOW IN NOT GRANTING CREDIT OF TDS TO THE TUNE OF RS.4,44,934/ - . THE LD. AR HAS CONTENDED THAT THE ISSUE MAY BE REMITTED BACK TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION IN LINE WITH DIRECTIONS OF TRIBUNAL IN ASSESSMENT YEAR 2008 - 09. WE FIND SIMILAR GROUND WAS RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 2008 - 09. THE TRIBUNAL HAS REMITTED THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO VERIFY THE RECORDS AND GIVE APPROPRIATE CREDIT IN THE TDS. THERE BEING NO CHANGE IN FACTS AND CIRCUMSTANCES, WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER WITH SIMILAR DIRECTIONS. THE ASSESSING OFFICER BEFORE DECIDING THIS ISSUE DE NOVO SHALL GRANT OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDANCE WITH LAW. ACCORDINGLY, GROUND NO. 13 RAISED IN THE APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 1 4 . IN GROUND NO. 14 THE ASSESSEE HAS ASSAILED THE LEVY OF INTEREST U/S. 234A OF THE ACT. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE HAS FILED RETURN OF INCOME WITHIN TIME LIMIT PRESCRIBED U/S. 139(1) OF THE ACT. WE ARE OF THE CONSIDERED VIEW THAT THIS ISSUE NEE DS VERIFICATION AND HENCE, WE REMIT THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION. THE ASSESSING OFFICER AFTER VERIFYING THE FACTS AND AFTER AFFORDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE SHALL DECIDE THIS ISSUE, IN ACCORDANCE WITH L AW. THUS, GROUND NO. 14 RAISED IN THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 17 ITA NO . 2231/PUN/2013, A.Y. 2009 - 10 15 . IN GROUND NO. 15 THE ASSESSEE HAS ASSAILED THE LEVY OF INTEREST U/S. 234B OF THE ACT. INTEREST U/S. 234B IS MANDATORY AND CONSEQUENTIAL , HENCE, THIS GROUND OF APPEAL O F THE ASSESSEE IS DISMISSED. 1 6 . IN GROUND NO. 16 THE ASSESSEE HAS ASSAILED THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. THIS GROUND RAISED BY THE ASSESSEE IS PRE - MATURE AND HENCE, THE SAME IS DISMISSED. 17 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTY ALLOWED IN THE AFORESAID TERMS. ORDER PRONOUNCED ON WEDNESDAY, THE 24 TH DAY OF MAY, 201 7 . SD/ - SD/ - ( / ANIL CHATURVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 24 TH MAY, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE DISPUTE RESOLUTION PANEL, PUNE 4. / THE CIT - I, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / ASSISTANT REGISTRAR , , / ITAT, PUNE