NORD Drivesystems Private Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 509/PUN/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9386 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 24-01-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 22-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Transfer pricing; Opportunity of being heard; Principle of natural justice; International transaction; Additional evidence; Wholly owned subsidiary

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.509/PUN/2015 / ASSESSMENT YEAR : 2010-11 NORD DRIVESYSTEMS PRIVATE LIMITED, 282/2, 283/2, PLOT NO.15, VILLAGE MANN, TALUKA MULSHI, ADJ. HINJEWADI MIDC PHASE-II, PUNE 411057 PAN : AACCN0708R . /APPELLANT VS. ACIT, CIRCLE-2, PUNE . / RESPONDENT ASSESSEE BY : SHRI SHARAD SHAH REVENUE BY : SHRI RAJEEV KUMAR, CIT / DATE OF HEARING : 24.01.2018 / DATE OF PRONOUNCEMENT: 07.02.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDE RS OF AO/TPO/DRP FOR THE A.Y. 2010-11. 2. ASSESSEE RAISED VARIOUS GROUNDS AS WELL AS ADDITIONAL G ROUNDS WHICH WERE SUBSEQUENTLY CONCISED VIDE LETTER DATED 16- 10-2017. THE CONCISE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER : 1. THE LD. AO/TPO ERRED IN MAKING (AND LD. DRP ERR ED IN UPHOLDING) ADDITION OF RS.6,94,00,000/-. 2. THE LD. TPO ERRED IN (AND LD. DRP ERRED IN UPHOL DING) DENYING FOLLOWING ADJUSTMENTS : A. CAPACITY UTILIZATION ADJUSTMENT IRRESPECTIVE OF THE FACT THAT IT IS SECOND FULL YEAR OF OPERATION. B. WORKING CAPITAL ADJUSTMENT C. CUSTOM DUTY ADJUSTMENT D. CASH PLI (WITHOUT PREJUDICE TO ABOVE GROUNDS) ITA NO.509/PUN/2015 NORD DRIVESYSTEMS PVT. LTD. 2 3. APPELLANT PLEADS REJECTIONS OF CERTAIN FUNCTIONA LLY NON COMPARABLE COMPANIES. 4. THE LD. AO/TPO ERRED IN COMPUTING TP ADJUSTMENT (AND LD. DRP ERRED IN CONFIRMING) ARRIVING AT THE PROFIT OF THE ASSESSEE BY REDUCING THE INCOME BY WAY OF GAIN DUE TO FLUCTUATION OF FOREIGN EXCHANGE. 5. THE LD. AO/TPO BE DIRECTED TO COMPUTE THE CORREC TED PLI ON BASIS OF FINANCIALS OF COMPARABLE COMPANIES. 6. THE APPELLANT PLEADS THAT YOUR HONOUR CONSIDERS THE PRICING POLICY ADOPTED BY THE GROUP OF APPELLANT VIS--VIS THIRD PARTY (DISCOUNT RATE COMPARED TO GROUPS GLOBAL PRICE LIST) FOR DET ERMINATION OF ARMS LENGTH PRICE FOR THE TRANSACTION OF PURCHASE. 7. THE LD. AO/TPO ERRED IN (AND LD. DRP ERRED IN CO NFIRMING) NON ACCEPTANCE IN CHANGE OF CHARACTERIZATION. 7.1 WHILE REJECTING THE CHANGE IN CHARACTERIZATION AO/TPO/DRP GAVE CERTAIN REASONING WHICH ARE INCORRECT OR LOGICALLY NOT RELEVANT FOR DECIDE THE ISSUE. 8. THE LD. AO/TPO ERRED IN (AND LD. DRP ERRED IN CO NFIRMING) NON ADOPTION OF ALTERNATE METHOD, THOUGH DISCUSSED BY T HE TPO, WHICH WOULD HAVE RESULTED IN A REDUCED TP ADJUSTMENT OF RS .3,04,00,000/-. 9. THE LD. TPO HAS ERRED IN (AND LD. DRP IN UPHOLDI NG MAKING TP ADJUSTMENTS ON TOTAL TURNOVER OF THE ASSESSEE INSTE AD OF MAKING ADJUSTMENT ON INTERNATIONAL TRANSACTIONS ONLY. 10. THE LD. TPO MAY PLEASE TO CONSIDER THE APPELLAN T PLEA TO PROVIDE THE BENEFIT OF +/- 5 PERCENT AS PER PROVISO TO SECT ION 92C(2) OF THE INCOME TAX ACT, 1961. 11. THE APPELLANT CRAVES ITS RIGHT TO ADD TO OR ALT ER THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE COURSE OF H EARING OF THE CASE. 3. DURING THE PROCEEDINGS, ASSESSEE FILED A CHART BEFORE U S MENTIONING THE RELEVANT EXTRACTS FROM THE ORDERS OF AO/TP O/DRP. THE CHART ALSO CONTAINS THE ASSESSEES SUBMISSIONS IN BR IEF, THE DETAILS OF ADDITIONAL EVIDENCES, WHEREVER RELEVANT ETC. ASSESSEE ALSO SUBMITTED THE DETAILS OF THE FAVOURABLE CASE LAWS IN THE LA ST COLUMN OF THE SAID CHART. CONSIDERING THE CONCISE NATURE OF THE ISS UES, REASONS AND SUBMISSIONS OF THE ASSESSEE, WE PROCEED TO ADJUDICAT E EACH OF THE ISSUES RAISED BY THE ASSESSEE BEFORE US RELYING ON THE SAID CHART. 4. BACKGROUND FACTS OF THIS CASE INCLUDE THAT THE ASSESSE E IS A COMPANY AND ENGAGED IN THE MANUFACTURE OF GEAR BOXES A ND GEAR MOTORS. ASSESSEE IS A MANUFACTURER-CUM-TRADER OF THE G EAR ITA NO.509/PUN/2015 NORD DRIVESYSTEMS PVT. LTD. 3 BOXES/MOTORS, A COMMISSION AGENT FOR GEAR BOXES AND GEA R MOTORS AND OTHER PARTS. ASSESSEE FILED THE RETURN OF INCOME REFL ECTING THE INTERNATIONAL TRANSACTIONS. A REFERENCE IS MADE TO THE T PO FOR COMPUTATION OF ARMS LENGTH PRICE IN RELATION TO THE INT ERNATIONAL TRANSACTIONS. ASSESSEE (NORD INDIA) IS A 100% SUBSIDIARY OF NORD, GERMANY. ASSESSEE UNDERTOOK THE INTERNATIONAL TRANSACT IONS WITH THE PARENT COMPANY WORTH RS.20.70 CRORES (ROUNDED OFF). TPO BENCHMARKED THE SAID INTERNATIONAL TRANSACTIONS, QUANTIFIED THE ADJUSTMENTS AND RECOMMENDED ADDITION OF RS.6.94 CRORES (R OUNDED OFF). AO MADE THE DRAFT ASSESSMENT ORDER ON 12-03-2014 AND THE PROPOSED ADDITION WORKS OUT TO RS.6,94,00,000/-. THE MAT TER WAS TRAVELLED TO THE DRP WITH VARIOUS ISSUES. THE DRP VIDE ORD ER DATED 26-12-2014 GAVE DIRECTIONS AS PER THE DISCUSSION GIVEN IN PARA 9 OF THEIR ORDER. THE DRP DID NOT FIND NEED TO INTERFERE WITH T HE ORDER OF THE TPO/AO ON MANY ISSUES. 5. AGGRIEVED WITH THE SAME, THE ASSESSEE IS IN APPEAL BEFO RE THE TRIBUNAL WITH THE AFOREMENTIONED CONCISE GROUNDS. WITH THE SE BACKGROUNDS FACTS, WE PROCEED TO ADJUDICATE EACH OF TH E ISSUES RAISED BY THE ASSESSEE BEFORE US RELYING ON THE CHART PROVIDE D BY THE LD. AR FOR THE ASSESSEE. 6. CONCISE GROUND NO.1 RELATES TO THE AFOREMENTIONED TP ADJUSTMENT AMOUNTING TO RS.6.94 CRORES. IT IS THE SUBMIS SION OF LD. AR FOR THE ASSESSEE THAT THE SAID GROUND IS GENERAL IN N ATURE AND THE SAME CAN BE DISMISSED . FURTHER, REFERRING TO CONCISE GROUND NO.4 AND 7, LD. AR FOR THE ASSESSEE SUBMITTED THAT THE SAME ARE NOT PRESSED . ACCORDINGLY, WE ORDER AND SAID GROUND NOS. 1, 4 AND 7 ARE DISMISSED. ITA NO.509/PUN/2015 NORD DRIVESYSTEMS PVT. LTD. 4 7. REFERRING TO CONCISE GROUND NOS. 9 AND 10, LD. AR SUBM ITTED THAT THE SAID GROUNDS ARE RELEVANT AT THE TIME OF ACTUA L CALCULATIONS. FROM THAT POINT OF VIEW, THE SAME CONSTITUTES CONSEQUENTIAL IN NATUR E. 8. AFTER HEARING BOTH THE SIDES, WE FIND GROUND NO.9 RELATE S TO THE METHOD OF CALCULATION OF ADJUSTMENTS QUA THE INTERNATIONA L TRANSACTIONS ONLY AND NOT LINKED TO THE TOTAL TURNOVER OF THE ASSESSEE. FURTHER, THE CONCISE GROUND NO.10 RELATES TO THE MARGIN OF +/- 5% WHICH IS OBVIOUSLY TO BE DECIDED BASED ON THE SETTLED LAW ON THIS ISSUE. ACCORDINGLY, THESE GROUND NOS. 9 AND 10 ARE DISMISSED AS CONSEQUENTIAL. 9. TO SUM UP, THE GROUNDS AT SL.NO. 1, 4, 7, 9 AND 10 STAN D DISMISSED. THAT LEAVES THE GROUND NOS. 2, 3, 5, 6 AND 8 FO R ADJUDICATION. THE GROUND-WISE ADJUDICATION IS GIVEN IN THE PARAGRAPHS BELOW OF THIS ORDER. 10. REGARDING THE CONCISE GROUND NO.2, LD. AR SUBMITTED TH AT IT HAS 4 INDEPENDENT SUB-GROUNDS AND THEY DEAL WITH (A) CAP ACITY UTILISATION ADJUSTMENT (B) WORKING CAPITAL ADJUSTMENT (C) CUST OM DUTY ADJUSTMENT AND (D) CASH PLI ADJUSTMENT. 11. BEFORE US, LD. AR FOR THE ASSESSEE SUBMITTED THAT ALL T HESE 4 ISSUES RELATE TO THE ECONOMIC ADJUSTMENTS REQUIRED TO B E GRANTED TO THE ASSESSEE WHILE MAKING TP ADJUSTMENTS. REFERRING TO T HE ADJUSTMENTS MENTIONED AT (A), (B) AND (D) ABOVE, LD. AR SUBMIT TED THAT THESE ISSUES ARE ADJUDICATED BY THE TRIBUNAL IN CONNECT ION WITH THE APPEAL FOR A.Y. 2009-10 AND THE TRIBUNAL PASSED AN ORDER DATED 30-03-2016 DECIDING THE ISSUES FAVOURABLE TO THE ASSESS EE. HE FAIRLY MENTIONED THAT THE SAID ORDER OF THE TRIBUNAL IS NOT IN EX ISTENCE AT THE TIME OF PASSING ORDERS BY THE DRP/TPO/AO. THEREFORE, L D. AR FOR THE ITA NO.509/PUN/2015 NORD DRIVESYSTEMS PVT. LTD. 5 ASSESSEE SUBMITTED THAT ALL THESE ISSUES SHOULD REVISIT TH E FILE OF TPO/AO FOR FRESH ADJUDICATION FOR WANT OF A FRESH DECISION I N THE LIGHT OF THE SAID ORDER OF THE TRIBUNAL FOR A.Y. 2009-10. REFERRIN G TO THE WORKING CAPITAL ADJUSTMENT AND CASH PLI ADJUSTMENT, LD . AR FOR THE ASSESSEE SUBMITTED THAT THE DRP ALLOWED SIMILAR ADJUSTMEN TS WHEN ADJUDICATING THE ISSUES RELATING TO THE A.Y. 2011-12. IT IS ALSO SUBMITTED THAT THE TPO HIMSELF ALLOWED THE ADJUSTMENTS TO WARDS WORKING CAPITAL ADJUSTMENT IN THE A.Y. 2011-12. FURTHER, R EFERRING TO THE CUSTOM DUTY ADJUSTMENT, LD. AR SUBMITTED THAT SIMILA R ADJUSTMENT WAS ALLOWED TO THE ASSESSEE BY THE DRP IN A SSESSEES OWN CASE FOR THE SUBSEQUENT ASSESSMENT YEAR 2011-12. THIS ORDER OF THE DRP IS ALSO SUBSEQUENT IN TIME. IN THIS REGARD, HE RELIED O N THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SKODA AUTO (INDIA) LTD. 122 TTJ 669 (PUNE) AND DEMAG CRANES & COMPON ENTS (INDIA) PVT. LTD. ITA NO.120/PN/2011. THUS, IT IS THE CASE OF LD. AR FOR THE ASSESSEE THAT ALL THESE ECONOMIC ADJUSTMENTS (CA PACITY UTILISATION, WORKING CAPITAL ADJUSTMENT, CASH PLI, CUSTOM DUT Y ADJUSTMENTS), IN THE INTEREST OF JUSTICE, SHOULD BE REMANDE D TO THE FILE OF TPO/AO FOR FRESH ADJUDICATION. THE FACT THAT SIMILAR ISSU ES WERE REMANDED BY THE TRIBUNAL FOR A.Y. 2009-10 WAS DEMONSTRA TED BY THE LD. AR FOR THE ASSESSEE BRINGING OUR ATTENTION TO PARA NO.44 OF THE SAID ORDER OF THE TRIBUNAL. 12. ON HEARING BOTH THE PARTIES ON THIS CONCISE GROUND N O.2 WHICH DEALS WITH THE SAID ECONOMIC ADJUSTMENTS, WE FIND THE SIMILA R ISSUES WERE REMANDED BY THE TRIBUNAL FOR A.Y. 2009-10. FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAID PARA NO.44 IS EXTRACT ED HERE AS UNDER : 44. IN VIEW OF THE DIRECTION OF THE DRP FOR A.Y. 2 011-12 ON VARIOUS ISSUES AND THE ORDER OF THE TPO FOR A.Y. 2009-10 WE ARE OF THE CONSIDERED OPINION THAT THE MATTER REQUIRES A RE-VI SIT TO THE FILE OF THE ITA NO.509/PUN/2015 NORD DRIVESYSTEMS PVT. LTD. 6 TPO FOR ADJUDICATION OF THE ENTIRE ISSUE AFRESH. W E ACCORDINGLY SET ASIDE THE MATTER TO THE FILE OF THE TPO FOR DETERMI NATION OF THE ALP KEEPING IN MIND THE DIRECTIONS FOR CAPACITY UTILISA TION ADJUSTMENT AND THE VARIOUS OTHER ADJUSTMENTS WHICH WERE ALLOWED T O THE ASSESSEE IN SUBSEQUENT ASSESSMENT YEARS BUT WERE NOT CONSIDERED BY THE DRP/TPO/AO FOR THE IMPUGNED ASSESSMENT YEAR. THE A O SHALL DECIDE THE ISSUE AS PER LAW AFTER GIVING DUE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PU RPOSES. 13. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT WITH SIMILAR DIRECTIONS, THE SAID CONCISE GROUND NO.2 RELATING TO ALL ASPE CTS OF THE ECONOMIC ADJUSTMENTS IS REMANDED TO THE FILE OF AO FOR FRES H ADJUDICATION AND FOR WANT OF A DECISION. AO SHALL GRANT REA SONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. THEREFORE, CONCISE GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 14. CONCISE GROUND NO.3 RELATES TO THE COMPARABLES. BA CKGROUND FACTS OF THIS ISSUE GOES BACK TO THE TP STUDY OF THE ASS ESSEE. IT IS THE SUBMISSION OF THE ASSESSEE THAT SOME OF THE COMPARABLES CONSIDERED BY THE TP STUDY TEAM ARE NOT FUNCTIONALLY COMPARABLE TO THAT OF THE ASSESSEE. M/S.PREMIUM ENERGY TRANSMISSION LTD., M/S.DE EPAK INDUSTRIES LTD., M/S. SHANTI GEARS LTD. GUJARAT AUTOMOT IVE GEARS LTD. AND M/S. FLENDER LTD. ARE THE FEW OF THEM. THE DECISION O F ASSESSEE IN CONSIDERING THESE COMPARABLES AS GOOD COMPARABLES TO TH E ASSESSEES CASE IS A MISTAKE AND THEREFORE, THE ASSESSEE PRAYS FOR EXCLUSION OF THE SAME FROM THE LIST OF THE GOOD COMPARABLES FOR MAKING TP S TUDY. ADMITTEDLY, THIS ISSUE IS RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL. IN THIS REGARD, ASSESSEE RELIED ON FOLLOWING DECISIONS VIZ. (1 ) QUARK SYSTEMS PVT. LTD. VS. DCIT ITA NO.100/CHD/2009 (SB) AND (2) BINDVIEW INDIA PVT. LTD. VS. DCIT ITA NOS. 1501/PN/2011 FO R THE PROPOSITION THAT THE TAXPAYER IS NOT STOPPED FROM CHANG ING THE COMPARABLES AT ANY STAGE OF THE PROCEEDINGS. IT IS THE SUBMISSION OF ITA NO.509/PUN/2015 NORD DRIVESYSTEMS PVT. LTD. 7 THE ASSESSEE THAT MISTAKES ARE APPARENT FROM THE FUNC TIONS OF THESE COMPANIES QUA THE FUNCTIONS OF THE ASSESSEE. IN THIS REG ARD, VARIOUS DETAILS ARE FURNISHED BEFORE US TO DEMONSTRATE THE ABOVE DIFFERENCES IN FUNCTIONS OF THE SAID COMPARABLES. 15. LD. DR FOR THE REVENUE OPPOSED THE ASSESSEES MOVE VEHEMENTLY. 16. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE FAC T THAT THE ASSESSEE IS NOT PREVENTED FROM REQUESTING FOR EXCLUSION O F CERTAIN COMPARABLES IF THEY ARE REALLY NOT COMPARABLE AND ALSO IN CASE, IF THEIR DECISION TO CONSIDER THEM AS GOOD COMPARABLES CONSTITUTE A MISTAKE. IN OUR VIEW, THERE IS A PRIMA-FACIE CASE IN FAVOUR OF THE AS SESSEE BOTH ON FACTS AND IN LAW. THEREFORE, WE ARE OF THE VIEW THAT TH IS GROUND CAN BE ADMITTED AT THIS STAGE. IN ANY CASE, IT IS A MATTER OF FACT THAT REQUIRES INPUTS FROM THE TPO/AO. LD. DR FOR THE REVENUE SUBMITTED THAT THE LEGAL PRINCIPLE PERMITS THE CONSIDERATION OF THE D EMAND FOR CHANGE OF THE COMPARABLES AT ANY TIME. ACCORDINGLY, CON CISE GROUND NO.3 RAISED BY THE ASSESSEE IS ADMITTED AND SET-ASIDE TO THE FILE OF TPO/AO FOR FRESH ADJUDICATION. 17. CONCISE GROUND NO.5 RELATES TO THE ALLOWING CORRECTION IN THE MARGINS OF COMPARABLES. IN THIS REGARD, LD. AR FOR THE ASS ESSEE BROUGHT OUR ATTENTION TO THE ORDER OF DRP AND SUBMITTE D THAT THE REQUEST OF THE ASSESSEE WAS NOT ACTUALLY COMMENTED UP ON BY THE DRP ON THE ISSUES RELATING TO THE REQUIRED CORRECTION TO TH E MARGINS OF THE COMPARABLE COMPANIES. THE FACT THAT ASSESSEE FILED RECTIFICA TION APPLICATION BEFORE THE DRP UNDER RULE 13 AND THE ABSENC E OF A DECISION IN THIS REGARD WAS ALSO BROUGHT TO OUR NOTICE. F URTHER, HE SUBMITTED THAT SIMILAR CORRECTIONS WERE ALLOWED BY THE DR P IN ITA NO.509/PUN/2015 NORD DRIVESYSTEMS PVT. LTD. 8 CONNECTION WITH THE COMPARABLES FOR THE A.Y. 2011-12. THE REFORE, IT IS THE PRAYER OF LD. AR FOR THE ASSESSEE BEFORE US FOR WAN T OF A DIRECTION FROM THE TRIBUNAL TO THE DRP/TPO/AO FOR TAKING UP APPROP RIATE MEASURES AFTER DUE PROCESS OF VERIFICATION OF THE FIGURES. 18. ON HEARING BOTH THE PARTIES ON THIS ISSUE, WE FIND THAT THE DRP/TPO/AO SHOULD BE DIRECTED TO INCORPORATE THE REQUIS ITE CORRECTION IN THE FIGURES AFTER DUE PROCESS OF VERIFICATION AND AFTER GRANTING REASONABLE OPPORTUNITY TO THE ASSESSEE ON THIS ISSUE. ACCORDINGLY, CONCISE GROUND NO.5 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 19. CONCISE GROUND NO.6 RELATES TO THE REQUIREMENT OF ADO PTING THE CORROBORATIVE APPROACH FOR DETERMINATION OF ALP. IN SHOR T, IT IS THE PRAYER OF THE ASSESSEE THAT NORD, GERMANY NEED TO BE ADOPTED AS A TESTED PARTY UNLIKE THE TP STUDY UNDERTAKEN BY THE AS SESSEES STUDY TEAM. CONSIDERING THE ASSESSEE AS A TESTED PARTY, IN T HIS REGARD, LD. AR FOR THE ASSESSEE MADE THE FOLLOWING SUBMISSIONS : THE APPELLANT SUBMITS THE PRICING POLICY ADOPTED B Y THE GROUP OF APPELLANT VIS-A-VIS THIRD PARTY (DISCOUNT RATE COMP ARED TO GROUPS GLOBAL PRICE LIST) FOR DETERMINATION OF ARMS LENGTH PRICE FOR THE INTERNATIONAL TRANSACTION OF PURCHASES. THE APPELLANT PLEADED TO CONSIDER THE ASSOCIATED EN TERPRISE (AE), I.E. NORD GERMANY AS THE TESTED PARTY INDICATES MARGIN EARNED BY NORD, GERMANY FROM SALE TO THIRD PARTY VENDORS IS HIGHER THAN THE MARGIN EARNED FROM SALE TO THE ASSESSEE. 20. CONSIDERING THE ABOVE SUBMISSIONS OF THE ASSESSEE, WE ARE OF T HE OPINION THAT THIS MATTER SHOULD ALSO REVISIT TO THE FILE OF TPO /AO FOR COMPREHENSIVE STUDY AND DECISION IN THE MATTER. WE DIREC T THE TPO/AO TO INVOKE THE PREVAILING LAW ON THE SUBJECT AND A DJUDICATE THE ISSUE IN ACCORDANCE WITH THE LAW. ACCORDINGLY, CONCISE GRO UND NO.6 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.509/PUN/2015 NORD DRIVESYSTEMS PVT. LTD. 9 21. CONCISE GROUND NO.8 RELATES NON-ADOPTION OF ALTERNATE METHOD FOR COMPUTING THE TP ADJUSTMENT AMOUNTING TO RS.3.04 CRO RES IN PLACE OF RS.6.94 CRORES. IT IS EVIDENT FROM THE TPOS ORDER THA T OF THE TWO FIGURES OF ADJUSTMENTS OF RS.2.94 CRORES AND RS.3.04 CRORES , THE TPO/AO ADOPTED THE FIGURE OF RS.6.94 CRORES TO BE SET O FF FOR ADJUSTMENT FOR CAPACITY UTILISATION. NO REASONS ARE GIVEN IN THE ORDERS AS TO WHY THE SUM OF RS.3.04 CRORES IS NOT TO BE CONSIDE RED. HIS ORDER DOES NOT SPECIFY WHY THE DEMAND FOR THE SAID CAPACITY U TILISATION ADJUSTMENT WAS NOT GRANTED. TO THAT EXTENT, WE FIND, TH E ORDER OF THE OFFICER DO NOT CONSTITUTE A SPEAKING ORDER. THEREFORE, I T REQUIRES REVISITING OF THE ISSUE TO THE FILE OF TPO/AO. RELYING ON VARIO US BINDING DECISIONS, LD. AR FOR THE ASSESSEE SUBMITTED THAT W HEN TWO VIEWS ARE POSSIBLE, THE FAVOURABLE DECISION TO THE ASSESSEE SHOULD BE ADOPTED WAS NOT FOLLOWED. 22. CONSIDERING THE SAME, WE ARE OF THE OPINION THAT THE O RDERS OF TPO/DRP, ON MANY ISSUES INCLUDING THE SAID DECISION OF THE T PO IN ADOPTING THE FIGURE OF RS.3.04 CRORES CONSTITUTES A NON-SP EAKING ORDER. HENCE, THE MATTER SHOULD REVISIT TO THE FILE OF AO FOR WAN T OF A SPEAKING ORDER. ACCORDINGLY, CONCISE GROUND NO.8 RAISED BY THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 23. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 07 TH DAY OF FEBRUARY, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 07 TH FEBRUARY, 2018. ITA NO.509/PUN/2015 NORD DRIVESYSTEMS PVT. LTD. 10 / COPY OF THE ORDER FORWARDED TO : BY ORDER // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT(A) - IT/TP, PUNE 4 . 5. CIT (A) - 13, PUNE % , , A BENCH PUNE; 6 . / GUARD FILE.