Rosemount Tank Gauging India Pvt.Ltd, Pune V. Deputy Commissioner of Income tax, Pune

ITA 422/PUN/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2103 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-12-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 20-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Transfer pricing; International transaction; Set aside
• Section: 64; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH C, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER . / ITA NO.422/PUN/2017 / ASSESSMENT YEAR : 2012-13 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 5 TH FLOOR, PLOT NO.23, RAJIV GANDHI INFOTECH PARK, PHASE-II, HINJEWADI, PUNE 411 057 PAN : AADCS9297H VS. DCIT, CIRCLE-5 PUNE APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE EMANATES FROM THE FINAL ASSESSMENT ORDER DATED 16-12-2016 PASSED BY THE ASSES SING OFFICER (AO) U/S.143(3) R.W.S.144C(13) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) IN RELATION TO THE ASSESSMENT YE AR 2012-13. ASSESSEE BY SHRI ALIASGER RAMPURWALA & SHRI PRATIK SHAH REVENUE BY SHRI T. VIJAYA BHASKAR REDDY DATE OF HEARING 05-12-2019 DATE OF PRONOUNCEMENT 09-12-2019 ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 2 2. THE ASSESSEE HAS FILED REVISED GROUNDS, WHICH HAVE N OT BEEN OBJECTED BY THE LD. DR. AS SUCH, WE ARE PROCEEDING WITH SUCH REVISED GROUNDS. 3. SUCCINCTLY, THE FACTUAL MATRIX OF THE CASE IS THAT THE A SSESSEE IS ENGAGED IN TRADING, INSTALLATION AND AFTER-SALES SERVICES OF T ANK GAUGING EQUIPMENTS. IT FILED RETURN DECLARING TOTAL INCOME OF RS.1,28,30,710/-. CERTAIN INTERNATIONAL TRANSACTIONS WERE REP ORTED IN FORM NO.3CEB. THE AO MADE A REFERENCE TO THE TRANSFER PRICING OFFICER (TPO) FOR DETERMINING THE ARMS LENGTH PRICE (ALP) OF THE INTERNATIONAL TRANSACTIONS. THE TPO NOTICED THE ASSESSEE TO HA VE ADOPTED THE TRANSACTIONAL NET MARGIN METHOD (TNMM) FOR DEMONSTRATING THAT THE INTERNATIONAL TRANSACTIONS WERE AT ALP. HE REJECTED THE TNMM AND APPLIED THE RESALE PRICE METHOD (RPM) A S THE MOST APPROPRIATE METHOD. IN DETERMINING THE ALP UNDER TH IS METHOD, HE SELECTED FOUR COMPANIES AS COMPARABLE WITH THEIR AVERAGE GROSS PROFIT MARGIN AT 32.81%. APPLYING THE SAME, HE PROPOSED TRANSFER PRICING ADJUSTMENT OF RS.6,14,21,652/ -. NO RELIEF WAS ALLOWED BY THE DISPUTE RESOLUTION PANEL (DRP). IN THE FINA L ASSESSMENT ORDER DATED 16-12-2016, THE AO MADE THE TRANS FER PRICING ADDITION AS PROPOSED IN THE DRAFT ORDER. THE ASSES SEE IS AGGRIEVED BY THE ADDITION SO MADE. ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 3 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH TH E RELEVANT MATERIAL ON RECORD. IT IS SEEN THAT THE ASSESSEE A PPLIED THE TNMM AS THE MOST APPROPRIATE METHOD, WHICH WAS REPLACED B Y THE TPO WITH THE RPM. THE INTERNATIONAL TRANSACTION UNDER CONSIDERATION IS TRADING, INSTALLATION AND AFTER-SALES SERVICE OF TANK GAUGING EQUIPMENTS, WHICH IS DONE WITHOUT ANY VALUE ADDITION MADE TO THE IMPORT OF GOODS FROM THE AES. WHEN THE GOOD S PURCHASED FROM THE AE ARE RESOLD AS SUCH WITHOUT ANY FU RTHER PROCESSING OR MAKING ANY VALUE ADDITION, THE RPM IS CONSIDER ED AS THE MOST APPROPRIATE METHOD. THE LD. AR WAS FAIR ENOUGH NOT TO CHALLENGE THE CORRECTNESS OF THE APPLICATION OF THE RPM AS THE MOST APPROPRIATE METHOD. 5. THE ASSAIL OF THE ASSESSEE IN THIS APPEAL IS TWO-FOLD . FIRST IS TO THE ERROR IN THE COMPUTATION OF THE TRANSFER PRICING ADDITION BY TAKING ALL THE DIRECT AND INDIRECT COSTS INCURRED BY THE ASSESSE E AND SECOND IS TO THE INCLUSION OF TWO COMPARABLES. WE WILL DEAL WITH BOTH THE ISSUES IN SERIATIM. 6. FIRSTLY, WE ESPOUSE THE ISSUE REGARDING THE CONSIDERATION OF ALL THE DIRECT AND INDIRECT COSTS INCURRED BY THE ASSESSEE IN THE COMPUTATION OF THE ALP UNDER THE RPM. IT IS NOTICED THAT THE TP O ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 4 ADOPTED GROSS PROFIT MARGIN OF THE FOUR COMPARABLE COMPA NIES AT 32.81%. SEPARATE CALCULATIONS OF ALL THE FOUR COMPANIES GR OSS PROFIT MARGINS HAVE BEEN MADE AT PAGES 11 ONWARDS OF THE ORDER OF THE TPO. THEREAFTER, HE PROCEEDED TO COMPUTE THE FINAL AD JUSTMENT AS UNDER:- COL. DESCRIPTION AMOUNT (RS.) A PRICE CHARGED (OPERATING REVENUE OF THE ASSESSEE) 22,37,34,855 B OPERATING COST (OC) 21,17,49,102 C ARMS LENGTH MEAN MARGIN (OP/OR) 32.81 D ARMS LENGTH PRICE (ALP) OF THE INTERNATIONAL TRANSACTION (A)- {(A)*(C)/100} 15,03,27,449 E 0.95% OF INTERNATIONAL TRANSACTION 20,11,61,646 F ADJUSTMENT OVER OPERATING INCOME [D-A] (SHORTFALL BEING ADJUSTMENT U/S.92CA) 6,14,21,652 7. WE HAVE GONE THROUGH THE STATEMENT OF PROFIT AND LOSS ACCOUNT OF THE ASSESSEE, WHICH IS AVAILABLE AT PAGE 64 OF T HE PAPER BOOK. FROM THERE, IT CAN BE SEEN THAT THE TPO HAS INITIALLY TAK EN A FIGURE OF TOTAL REVENUE AS PRICE CHARGED STANDING AT RS.22,37,34,855/-. THEREAFTER, HE REDUCED `OPERATING COST AMOUNTING TO RS.21,17,49,102/-, WHICH IS THE FIGURE OF TOTAL EXPENSES IN THE PROFIT AND LOSS ACCOUNT. THIS FIGURE OF TOTAL EXPENSES INCURRED BY THE ASSESSEE INCLUDES NOT ONLY THE P URCHASE COSTS BUT ALSO EMPLOYEES BENEFITS, DEPRECIATION AND AMORTIZA TION ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 5 AND OTHER EXPENSES. ON HAVING A GLANCE AT THE PROFIT AND L OSS ACCOUNT OF THE ASSESSEE ON ONE HAND AND THE TRANSFER PR ICING ADJUSTMENT MADE BY THE TPO ON THE OTHER, IT IS DISCERNIBLE TH AT THE TPO HAS CONSIDERED ALL THE DIRECT AND INDIRECT EXPENSES OF TH E ASSESSEE FOR THE PURPOSE OF EXCLUSION FROM THE TOTAL REVEN UES. THUS, IT CAN BE SEEN THAT POR UNA PARTE THE TPO HAS CONSIDERED GROSS PROFIT MARGIN OF THE COMPARABLES AND POR OTRA PARTE HE TOOK THE NET PROFIT MARGIN OF THE ASSESSEE. THE CLAIM OF THE LD. AR IS THAT THE FIGURES INVOLVED IN THE DETERMINATION OF THE ALP UNDER THE RPM CONCERNING THE ASSESSEE SHOULD ALSO HAVE BEEN TAKEN AT GR OSS LEVEL AND NOT THE NET LEVEL. 8. IN ORDER TO ASCERTAIN THE CORRECT POSITION, IT IS PERTINENT T O NOTE THE MECHANISM FOR DETERMINING THE ALP UNDER THE RPM, ENSHRINE D IN RULE 10B(1)(B), AS UNDER :- (B) RESALE PRICE METHOD, BY WHICH, (I) THE PRICE AT WHICH PROPERTY PURCHASED OR SERVI CES OBTAINED BY THE ENTERPRISE FROM AN ASSOCIATED ENTERPRISE IS RESOLD OR ARE PROVIDED TO AN UNRELATED ENTERPRISE, IS IDENTIFIED ; (II) SUCH RESALE PRICE IS REDUCED BY THE AMOUNT OF A NORMAL GROSS PROFIT MARGIN ACCRUING TO THE ENTERPRISE OR T O AN UNRELATED ENTERPRISE FROM THE PURCHASE AND RESALE O F THE SAME OR SIMILAR PROPERTY OR FROM OBTAINING AND PROVIDING THE SAME OR SIMILAR SERVICES, IN A COMPARABLE UNCONTROLLED T RANSACTION, OR A NUMBER OF SUCH TRANSACTIONS ; ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 6 (III) THE PRICE SO ARRIVED AT IS FURTHER REDUCED B Y THE EXPENSES INCURRED BY THE ENTERPRISE IN CONNECTION WITH THE P URCHASE OF PROPERTY OR OBTAINING OF SERVICES ; (IV) THE PRICE SO ARRIVED AT IS ADJUSTED TO TAKE I NTO ACCOUNT THE FUNCTIONAL AND OTHER DIFFERENCES, INCLUDING DIFFERE NCES IN ACCOUNTING PRACTICES, IF ANY, BETWEEN THE INTERNATI ONAL TRANSACTION AND THE COMPARABLE UNCONTROLLED TRANSAC TIONS, OR BETWEEN THE ENTERPRISES ENTERING INTO SUCH TRANSACT IONS, WHICH COULD MATERIALLY AFFECT THE AMOUNT HAS BEEN OF GROSS PROFIT MARGIN IN THE OPEN MARKET ; (V) THE ADJUSTED PRICE ARRIVED AT UNDER SUB-CLAUSE (IV) IS TAKEN TO BE AN ARMS LENGTH PRICE IN RESPECT OF THE PURCH ASE OF THE PROPERTY OR OBTAINING OF THE SERVICES BY THE ENTERP RISE FROM THE ASSOCIATED ENTERPRISE ; 9. THE CRUX OF THE RPM AS GIVEN IN RULE 10B(1)(B) IS THA T FIRSTLY THE PRICE AT WHICH PROPERTY PURCHASED FROM AN ASSOCIATED ENTER PRISE IS RESOLD TO AN UNRELATED ENTERPRISE IS IDENTIFIED, WHICH IS REDU CED BY THE AMOUNT OF NORMAL GROSS PROFIT MARGIN ACCRUING IN A COMPARABLE UNCONTROLLED TRANSACTION. THE PRICE SO ARRIVED AT IS REDUCED BY THE EXPENSES INCURRED BY THE ENTERPRISE IN CONNECTION WITH THE P URCHASE OF PROPERTY , WHICH IS FURTHER ADJUSTED TO TAKE INTO ACCOUNT THE FUNCTIONAL AND OTHER DIFFERENCES, IF ANY. THE PRICE WHICH FOLLOWS THEREAFTER IS TAKEN AS AN ARMS LENGTH PRICE OF THE PURCHA SE OF PROPERTY BY THE ENTERPRISE FROM THE ASSOCIATED ENTERPRISE. 10. A CAREFUL CIRCUMSPECTION OF SUB-CLAUSE (II) OF RULE 10 B(1)(B) DIVULGES THAT IT IS NORMAL `GROSS PROFIT MARGIN OF THE COMPARABLES, ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 7 WHICH IS CONSIDERED FOR APPLICATION. THEN SUB-CLAUSE (III) REV EALS THAT THE PRICE ARRIVED AT AFTER APPLYING THE GROSS PROFIT OF THE COMPARABLES IS REDUCED BY THE `EXPENSES INCURRED BY THE ENTERPRISE IN CONNECTION WITH THE PURCHASE OF PROPERTY . SUB-CLAUSE (IV) TALKS OF ADJUSTING THE PRICE AS DETERMINED UNDER SUB-CLAUSE (III) W ITH DIFFERENCES INCLUDING DIFFERENCES IN ACCOUNTING PRACTICES, IF ANY, BETWEEN THE INTERNATIONAL TRANSACTION AND THE COMPARABLE UNCONTROLLED TRANSACTIONS. ON A CONJOINT READING OF THE RELEVANT PARTS OF ABOVE SUB-CLAUSES, IT IS MANIFESTED THAT THE RPM CO MPARES THE TRANSACTION AT GROSS PROFIT LEVEL, WHICH MEANS CONSIDERING ALL THE DIRECT COSTS FORMING PART OF THE TRADING ACCOUNT ONLY. NO T ONLY THE `GROSS PROFIT MARGIN OF THE COMPARABLES IS TAKEN FOR APPLIC ATION TO THE SALE PRICE OF THE GOODS PURCHASED FROM THE AE, BUT A LSO THE EXPENSES INCURRED BY THE ASSESSEE IN CONNECTION WITH THE PU RCHASE OF GOODS ARE THEN SOUGHT TO BE REDUCED. THE MANDATE IS FOR REDUCING ONLY THE EXPENSES INCURRED BY THE ASSESSEE IN CONNECTION W ITH THE PURCHASE OF GOODS AND NO OTHER EXPENSES. ON A RELATIV E ANALYSIS, IT EMERGES THAT IT IS ONLY THE ITEMS OF THE TRADING ACCOUNT OF THE COMPARABLES AS WELL AS THE ASSESSEE WHICH GO INTO DETERMININ G THE ALP OF THE INTERNATIONAL TRANSACTION OF PURCHASE OF GOODS FRO M THE AES UNDER THE RPM. IF UNDER SUB-CLAUSE (III), WE PROCE ED TO REDUCE ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 8 THE INDIRECT COSTS ALSO, MEANING THEREBY, THE COSTS DEBITED TO THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE, THE EFFECT WOULD BE THAT WE WOULD BE COMPARING THE FIGURE OF COMPARABLES AT GROSS LEV EL WITH THE FIGURE OF THE ASSESSEE AT NET LEVEL, DISTORTING THE COMPAR ABILITY. SUB-CLAUSE (IV) TALKS OF EVEN IRONING OUT THE DIFFERENCES IN THE ACCOUNTING PRACTICES OF THE ASSESSEE AND COMPARABLES. ITS RATIONALE IS THAT EVEN AFTER CONSIDERING ALL THE COSTS DEBITED TO THE TRAD ING ACCOUNT OF BOTH THE ASSESSES AND COMPARABLES, IF STILL THERE REMAINS SOME DIFFERENCE DUE TO FOLLOWING OF DIFFERENT ACCOUNTING PR ACTICES, THEN THE EFFECT OF SUCH DIFFERENCE SHOULD ALSO BE GIVEN TO IN THE DETERMINATION OF THE ALP. IT MAY COVER A SITUATION IN WHICH A COMPARABLE MAY HAVE EITHER DEBITED AN ITEM OF INDIRECT COST TO THE TRADING ACCOUNT OR SOME DIRECT COST TO THE PROFIT AND LOSS ACC OUNT, EFFECT OF WHICH IS REQUIRED TO BE GIVEN. THERE IS NO PRES CRIPTION WHAT SO EVER FOR CONSIDERING THE INDIRECT COSTS EITHER OF THE ASSESSEE OR THE COMPARABLES IN DETERMINING THE ALP UNDER THE RPM. 11. THE TPO, IN THE CALCULATION EXTRACTED ABOVE, HAS RIGHTLY CONSIDERED THE GROSS PROFIT MARGIN OF THE COMPARABLES, BUT STEPPED OUT OF THE METHOD IN CONSIDERING THE `OPERATING COST OF THE ASSESSEE AND HAS, IN FACT, INCLUDED ALL THE DIRECT AND IND IRECT COSTS OF THE ASSESSEE. THE METHOD ADOPTED BY THE TPO HAS BECOME A HYBRID ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 9 OF THE RPM AND THE TNMM, WHICH HAS NEEDLESSLY DRAGGED DO WN THE ALP OF THE INTERNATIONAL TRANSACTION OF PURCHASE OF GOODS. AS AGAINST THAT, HE OUGHT TO HAVE CONSIDERED ONLY THE DIRECT COSTS OF THE ASSESSEE SO AS TO BRING PARITY WITH THE GROSS MARGIN OF THE COMPARABLES UNDER THE RPM. THUS THE IMPUGNED ORDER CAN NOT BE SUSTAINED TO THIS EXTENT . WE, THEREFORE, SET-ASIDE THE IMPUGNED ORDER PRO TANTO AND HOLD THAT ONLY THE DIRECT COSTS INCURRED BY THE ASSESSEE SHOULD BE CONSIDERED. 12. THE ASSESSEE HAS ALSO DISPUTED THE INCLUSION OF TWO COM PANIES IN THE FINAL SET OF COMPARABLES, NAMELY, LARSEN AND TOU BRO LTD. AND SIEMENS LTD. (I) LARSEN AND TOUBRO LTD : 13. THE TPO CONSIDERED THIS COMPANY AS COMPARABLE BY OBSERVING IN PARA 8.5 OF HIS ORDER THAT HE WAS TAKING ONLY THE TRADING SEGMENT OF L&T. THEREAFTER, HE WORKED OUT THE GROSS PROFIT MARG IN OF L&T STARTING WITH THE FIGURE OF REVENUE FROM TRADING ACTIVITY AT RS.6389.29 CRORE WITH REFERENCE TO NOTE (Q)(25)(A)(I) O N PAGE 186 OF THE ANNUAL REPORT OF THE COMPANY. WE HAVE PERUSED S UCH REPORT, WHOSE COPY HAS BEEN PLACED IN THE PAPER BOOK. THE FIGU RE OF RS.6389.29 CRORE IS GIVEN UNDER THE MAJOR HEAD OF `SALES & SERVICE ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 10 AND SUB-HEAD OF MANUFACTURING, TRADING AND PROPERTY DEV ELOPMENT ACTIVITY. IT IS THIS FIGURE WHICH HAS BEEN CONSIDERED BY THE TPO AS REVENUE FROM TRADING ACTIVITY FOR THE PURPOSE OF COMPUTIN G THE GROSS PROFIT MARGIN OF THIS COMPANY. THE ASSESSEE ALSO CO NTENDED BEFORE THE TPO THAT L&T WAS ENGAGED IN OTHER OPERATIONS ALS O UNLIKE THE ASSESSEE ENGAGED ONLY IN THE TRADING OPERATIONS, W HICH WAS JETTISONED BY THE TPO BY OBSERVING THAT HE WAS CONSIDERING THE COMPANYS ONLY TRADING SEGMENT. WE HAVE ALSO GONE THROUGH THE SEGMENTAL REPORTING OF L&T LTD. FROM WHICH IT CAN BE SEE N THAT NO SEPARATE FIGURES FOR TRADING SEGMENT ARE AVAILABLE. AS THE ASSESSEE IS ADMITTEDLY ONLY IN THE TRADING, THE CONSIDERATION OF L&T LTD.S FIGURES ALSO INCLUDING MANUFACTURING AND PROPERTY DEVELOPMENT ACTIVITIES, DO NOT SERVE AS A GOOD COMPARABLE. WE, THEREFORE, ORDER TO REMOVE L&T LTD. FROM THE LIST OF COMPA RABLES. (II) SIEMENS LTD : 14. THE TPO HAS COMPUTED AT PAGE 11 OF HIS ORDER THE `G ROSS MARGIN OF TRADING ACTIVITY ONLY OF SIEMENS LTD. AT 49.20%. WE HAVE GONE THROUGH THE ANNUAL REPORT OF THIS COMPANY. IT CAN BE SEEN THAT THE YEAR ENDING OF THIS COMPANY IS 30-09-2012. AS AGAINST THAT, THE ASSESSEE IS MAINTAINING ITS ACCOUNTS ON FINANCIAL YEA R ENDING BASIS. THE HONBLE BOMBAY HIGH COURT IN CIT VS. PTC ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 11 SOFTWARE (2017) 395 ITR 176 (BOM.) HAS HELD THAT THE COMPANIES WITH DIFFERENT FINANCIAL YEAR ENDINGS CANNOT BE CONSIDERED A S COMPARABLE UNDER RULE 10B. WITHOUT GOING INTO FURTHER ANALYS IS AND FOLLOWING THE PRECEDENT ON THIS PRELIMINARY ISSUE, WE ORDER TO DELETE THIS COMPANY FROM THE LIST OF COMPARABLES. 15. GROUND NO.5 IS AGAINST MAKING TRANSFER PRICING ADDITION O N THE ENTITY LEVEL FIGURES OF THE ASSESSEE COMPANY RATHER THAN THE INTERNATIONAL TRANSACTIONS. 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. THE CONTENTION OF THE LD. AR IS THAT THE TRANSFER PRICING ADDITION HAS BEEN MADE ON THE ENTITY LEVEL FIG URES OF THE ASSESSEE, WHICH OUGHT TO HAVE BEEN RESTRICTED ONLY THE INTERNATIONAL TRANSACTIONS. WE FIND THAT THIS ISSUE IS NO MORE RES INTEGRA IN VIEW OF CATENA OF JUDGMENTS DELIVERED BY THE VARIOUS HIGH COURTS. THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT VS. THYSSEN KRUPP INDUSTRIES INDIA PRIVATE LTD. (2016) 381 ITR 413 (BOM) HAS HELD THAT THE TRANSFER PRICING ADDITION CAN BE MADE ON LY WITH REFERENCE TO THE INTERNATIONAL TRANSACTIONS AND NOT THE TRANSACTIONS WITH THE NON-ASSOCIATED ENTERPRISES. SIMILAR VIEW HAS BEEN ESPOUSED BY THE HONBLE DELHI HIGH COURT IN CIT VS. KEIHIN ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 12 PANALFA LTD. (2016) 381 ITR 407 (DEL) . RESPECTFULLY FOLLOWING THE PRECEDENTS, WE HOLD THAT THE TRANSFER PRICING ADDITION SHOULD BE RESTRICTED ONLY TO THE INTERNATIONAL TRANSACTIONS. 17. GROUND NOS. 6 AND 7 ABOUT CHARGING OF INTEREST ARE CONSEQUENTIAL. 18. TO SUM UP, WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE AO/TPO FOR CARRYING OUT A FRESH DETERMINATION OF THE ALP OF THE INTERNATIONAL TRANSACTIONS IN CONSONANCE WITH OUR ABO VE OBSERVATIONS. 19. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE S. ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH DECEMBER, 2019. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 09 TH DECEMBER, 2019 ITA NO.422/PUN/2017 ROSEMOUNT TANK GAUGING INDIA PVT. LTD., 13 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-13, PUNE 4. 5. 6. THE PR.CIT-V, PUNE , , C / DR C, ITAT, PUNE; / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR P RIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 05-12-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 06-12-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *