LUBRIZOL INDIA P.LTD, MUMBAI V. ASST CIT LTU-2, MUMBAI

ITA 6667/MUM/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8828 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 15-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANAND MOHAN LD
• Assessee Lawyers: PERCY PARDIWALALD SR
• Keywords: Transfer pricing; International transaction; Rule of consistency; TDS; Set aside
• Section: 271(1)(c); 143(3); 10B

Judgement Text

M/S. LUBRIZOL INDIA PRIVATE LIMITED ASSESSMENT YEARS :2009-10, 2010-11 & 2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI , , BEFORE HONBLE SHRI PAWAN SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.882/MUM/2014 ( / ASSESSMENT YEAR:2009-10) & ./ I.T.A. NO.396/MUM/2015 ( / ASSESSMENT YEAR:2010-11) & ./ I.T.A. NO.6667/MUM/2016 ( / ASSESSMENT YEAR:2012-13) M/S. LUBRIZOL INDIA PRIVATE LIMITED PLANT: 9/3, THANE BELAPUR ROAD TURBHE, NAVI MUMBAI 400 705 MAHARASHTRA CIN: U23201MH1966PTC013538 / VS. THE ASSTT. COMMISSIONER OF INCOME TAX -LTU 29TH FLOOR, CENTRE NO.1 WORLD TRADE CENTRE, CUFFE PARADE MUMBAI-400 005. LM ./ ./PAN/GIR NO. AAACL-0126- H ( MR /APPELLANT ) : (TUMR / RESPONDENT ) ASSESSEE BY : SHRI PERCY PARDIWALA-LD. SR. COUNSEL REVENUE BY : SHRI ANAND MOHAN-LD. CIT-DR / DATE OF HEARING : 15/07/2020 / DATE OF PRONOUNCEMENT : 27/07/2020 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) M/S. LUBRIZOL INDIA PRIVATE LIMITED ASSESSMENT YEARS :2009-10, 2010-11 & 2012-13 2 1. THE GRIEVANCE OF THE ASSESSEE IN ALL THE ABOVE T HREE APPEALS FOR ASSESSMENT YEARS 2009-10, 2010-11 & 2012-13 IS MORE OR LESS THE SAME. THEREFORE, THE APPEALS WERE HEARD TOGETHER AN D ARE NOW BEING DISPOSED-OFF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. IT IS ADMITTED POSITION TH AT ADJUDICATION IN ANY ONE YEAR SHALL APPLY TO OTHER YEARS ALSO. TAKING AY 2009-10 AS THE LEAD YEAR WE PROCEED WITH THE ADJUDICATION OF ALL THESE APPEALS. ITA NO. 882/MUM/2014, AY 2009-10 2. THIS APPEAL CONTEST CERTAIN TRANSFER PRICING (TP ) ADJUSTMENTS AS MADE BY LD. ASSESSING OFFICER (AO) IN FINAL ASSESSM ENT ORDER DATED 03/12/2013 PASSED U/S 143(3) R.W.S. 144C(13) OF THE INCOME TAX ACT, 1961 PURSUANT TO THE DIRECTIONS OF LD. DISPUTE RESO LUTION PANEL-1, MUMBAI (DRP) U/S 144C(5) DATED 30/10/2013. THE ASSE SSEE HAS BEEN SADDLED WITH TRANSFER PRICING ADJUSTMENT OF RS.347. 41 LACS IN THE FINAL ASSESSMENT ORDER, WHICH IS THE SUBSTANTIAL SUBJECT MATTER OF THIS APPEAL. THE ASSESSEE IS BEFORE US ON FOLLOWING GROUNDS OF A PPEAL: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. A.O ERRED IN ASSESSING THE INCOME OF THE APPELLANT UNDER THE NOR MAL PROVISIONS OF THE ACT AT RS.69,69,74,500/- AGAINST THE RETURNED INCOME OF RS .66,22,32,943/- BASED ON THE DIRECTIONS RECEIVED FROM HONBLE DISPUTE RESOLUTION PANEL (DRP) UPHOLDING THE ADJUSTMENT TO THE TRANSFER PRICE PROPOSED BY THE LD . TRANSFER PRICING OFFICER (TPO). 2. TRANSFER PRICING : - 2.1 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. A.O/TPO ERRED IN PROPOSING AND THE HONBLE DRP FURTHER ERR ED IN UPHOLDING AN ADJUSTMENT OF RS.3,47,41,557/- IN RESPECT OF THE INTERNATIONAL TR ANSACTIONS PERTAINING TO EXPORT OF CHEMICAL ADDITIVES, ALLEGING THAT THE SAME TO BE NO T AT ARMS LENGTH IN TERMS OF THE PROVISIONS OF SECTION 92C(1) AND 92C(2) OF THE ACT R.W.R. 10D OF THE INCOME TAX RULES, 1962 (RULES). 2.2 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD. TPO/DRP/AO ERRED IN REJECTING THE APPLICATION OF TR ANSACTIONAL NET MARGIN METHOD (TNMM) AS THE MOST APPROPRIATE METHOD USED BY THE APPELLANT FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS IN RESPECT OF ITS EX PORTS OF CHEMICAL ADDITIVES TO ITS ASSOCIATED ENTERPRISE (AES). M/S. LUBRIZOL INDIA PRIVATE LIMITED ASSESSMENT YEARS :2009-10, 2010-11 & 2012-13 3 2.3 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. TPO/DRP/AO FAILED TO APPRECIATE THAT THE OPERATING MARGIN (OM) EARNED BY THE APPELLANT OF 13.57% AT ENTITY LEVEL IS HIGHER THAN THE ARITHMETIC MEAN OF UPDATED OM OF 8.86% OF COMPARABLE COMPANIES (AS CALCULATED BY THE APPELLANT) AND THE UPDATED OM OF 4.54% OF APPELLANTS DIRECT COMPETIT OR I.E. INDIA ADDITIVES LTD., WHICH JUSTIFIES THAT THE INTERNATIONAL TRANSACTIONS ENTER ED INTO BY THE APPELLANT ARE AT ARMS LENGTH. 2.4 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. TPO / DRP/AO ERRED IN NOT APPRECIATING THAT, THE APPELL ANT DURING THE RELEVANT PERIOD HAS PERFORMED HIS SCIENTIFIC ANALYSIS FOR SELECTION OF THE MOST APPROPRIATE METHOD HAVING REGARD TO THE PROVISIONS OF THE RULE 10B OF THE RUL ES. 2.5 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. TPO / DRP/ASSESSING OFFICER ERRED IN CONSIDERING COMPARAB LE UNCONTROLLED PRICE (CUP) METHOD AS THE MOST APPROPRIATE METHOD TO BENCHMARK THE EXPORT OF CHEMICAL ADDITIVES. 2.6 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. TPO /DRP/ASSESSING OFFICER ERRED IN APPRECIATING THE FA CTS AND REASONING OF THE APPELLANT IN RELATION TO VOLUME, GEOGRAPHY AND OTHE R DIFFERENCES DUE TO WHICH CUP METHOD COULD NOT BE TREATED AS THE MOST APPROPRIATE METHOD. 2.7 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. TPO/DRP/ASSESSING OFFICER ERRED IN DISREGARDING THE SUBMISSIONS SUGGESTING APPROPRIATE ADJUSTMENTS TO BE MADE TO THE EXPORT PR ICE CHARGED TO AES AND SALES PRICE CHARGED TO UNRELATED PARTIES IN INDIA, TO MAK E THE SAME COMPARABLE WITH EACH OTHER (WITHOUT PREJUDICE TO ITS CONTENTION THAT CUP IS NOT THE MOST APPROPRIATE METHOD TO BENCHMARK THE EXPORT OF CHEMICAL ADDITIVE S). 2.8 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. TPO/DRP/AO FAILED TO APPRECIATE THAT THE APPELLANT IS A 50:50 JOINT VENTURE AND THE TRANSACTIONS OF THE APPELLANT WITH AE OF ONE JOINT VENTURE PARTNER IS GENERALLY MONITORED BY THE OTHER JOINT VENTURE PARTNER WHO WO ULD WANT TO PROTECT HIS INTEREST IN PROFITS FROM THE JOINT VENTURE. 2.9 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. TPO/DRP/AO ERRED IN REJECTING THE WHOLE ENTITY APPR OACH ADOPTED BY THE APPELLANT FOR BENCHMARKING THE EXPORT OF CHEMICAL ADDITIVE WH ICH THE REVENUE AUTHORITIES (DEPARTMENT) HAD ACCEPTED IN THE PREVIOUS ASSESSMEN T FOR A.Y 2002-03, A.Y 2003- 04, A.Y 2004-05 AND A.Y 2005-06. 2.10 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD. TPO /DRP/AO ERRED IN REJECTING THE SEGMENTAL INFORMATIO N BETWEEN THE AE AND NON-AE AS PROVIDED BY THE APPELLANT BY MAKING IRRATIONAL A SSUMPTIONS AND WITHOUT PROVIDING ANY COGENT REASONS. 3. LEVY OF INTEREST U/S 234B,234C AND 234D: - THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. ASSESSING OFFICER, ERRED IN LEVYING INTEREST UNDER SECTION. 234B, 23 4C AND 234D. 4. LEVY OF PENALTY U/S. 271(1)(C):C- THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. ASSESSING OFFICER, ERRED IN PROPOSING THE INITIATION OF THE PENALTY PR OCEEDINGS U/S. 271(1)(C) OF THE ACT. M/S. LUBRIZOL INDIA PRIVATE LIMITED ASSESSMENT YEARS :2009-10, 2010-11 & 2012-13 4 3.1 THE LD. SR. COUNSEL FOR ASSESSEE, SHRI PERCY PA RDIWALA, DREW OUR ATTENTION TO THE ORDERS OF LOWER AUTHORITIES TO SUB MIT THAT THE TRANSACTIONAL NET MARGIN METHOD (TNMM) AS ADOPTED B Y THE ASSESSEE TO BENCHMARK THE INTERNATIONAL TRANSACTIONS HAS BEE N REJECTED WITHOUT ANY SOUND BASIS PARTICULARLY WHEN THE SAME METHODOL OGY HAS BEEN ACCEPTED BY THE REVENUE IN MOST OF THE EARLIER AS W ELL AS IN SUCCEEDING YEARS. IN PARTICULAR, RELIANCE HAS BEEN PLACED ON T HE RECENT ORDER OF TRIBUNAL IN ASSESSEES OWN CASE FOR AYS 2005-06 TO 2007-08, ITA NOS. 8148/MUM/2010, 2305/MUM/2012 & 1821/MUM/2011, COMMO N ORDER DATED 20/11/2019 TO SUBMIT THAT THE SIMILAR METHODO LOGY AS ADOPTED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE TRIBUNAL IN T HOSE YEARS AND FACTS ARE IDENTICAL IN THESE YEARS AND THEREFORE, S AME VIEW MAY BE TAKEN IN THE MATTER. IN OTHER WORDS, LD. SR. COUNSEL SUBM ITTED THAT THE ISSUE STOOD COVERED IN ASSESSEES FAVOR BY THE CITED ORDE R OF THE TRIBUNAL. A COPY OF THE ORDER HAS BEEN PLACED ON RECORD. 3.2 PER CONTRA, SHRI ANAND MOHAN, LD. CIT-DR SUBMIT TED THAT PRINCIPLE OF RES-JUDICATA WOULD NOT APPLY TO INCOME TAX PROCEEDINGS AND SINCE THE ASSESSEE FAILED TO QUANTIFY / SUPPLY THE NECESSARY INFORMATION AS CALLED FOR BY LD. TPO, THE ADDITIONS WERE JUSTIFIED. IN TH E SAID BACKGROUND LD. CIT-DR JUSTIFIED THE APPLICATION OF COMPARABLE UNCO NTROLLED PRICE (CUP) METHOD AND REJECTION OF TNMM METHOD BY LD. TPO TO B ENCHMARK THE CONCERNED TRANSACTIONS. 4.1 WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS A ND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING THE CITED DEC ISION OF TRIBUNAL IN M/S. LUBRIZOL INDIA PRIVATE LIMITED ASSESSMENT YEARS :2009-10, 2010-11 & 2012-13 5 ASSESSEES OWN CASE. OUR ADJUDICATION TO THE SUBJEC T MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 4.2 THE MATERIAL ON RECORD WOULD SHOW THAT THE ASSE SSEE IS A 50:50 JOINT VENTURE BETWEEN LZ US AND INDIAN OIL CORPORAT ION LTD. THE ASSESSEE IS SPECIALTY CHEMICAL COMPANY SERVING THE NEEDS OF THE PETROLEUM INDUSTRY. THE ASSESSEE IS STATED TO BE EN GAGED IN THE BUSINESS OF DEVELOPING, MANUFACTURING AND MARKETING OF ADDITIVE SYSTEMS FOR AUTOMOTIVE AND INDUSTRIAL LUBRICANTS AN D FOR TREATMENT OF FUELS. 4.3 A DRAFT ASSESSMENT ORDER WAS PASSED BY LD. AO O N 11/02/2013 PURSUANT TO THE ORDER OF LD. TRANSFER PRICING OFFIC ER-1(5), MUMBAI (TPO) DATED 27/11/2012. THE ASSESSEE PREFERRED OBJECTIONS AGAINST THE SAME BEFORE LD. DRP WHICH WERE DISPOSED-OFF VIDE DIRECTI ONS DATED 30/10/2013. PURSUANT TO THE SAID DIRECTIONS, FINAL ASSESSMENT ORDER WAS PASSED ON 03/12/2013 INCORPORATING CERTAIN TP ADJUS TMENTS. AGAINST THIS ORDER, THE ASSESSEE IS UNDER APPEAL BEFORE US. 4.4 THE INTERNATIONAL TRANSACTIONS CARRIED OUT BY T HE ASSESSEE WITH ITS ASSOCIATED ENTERPRISES (AE) WERE REFERRED TO LD. TP O FOR DETERMINATION OF ARMS LENGTH PRICE (ALP). THESE TRANSACTIONS WER E IN THE NATURE OF IMPORT OF RAW MATERIAL & FINISHED GOODS, PAYMENT TO WARDS FEE, EXPORTS OF CHEMICAL ADDITIVES AND COMMISSION ON CUSTOMER SERVI CE SUPPORT ACTIVITIES. IN ASSESSEES TP STUDY REPORT, ALL THES E TRANSACTIONS WERE AGGREGATED AND BENCHMARKED USING ENTITY LEVEL TNMM METHOD. ONE OF THE TRANSACTIONS VIZ. EXPORT OF CHEMICAL ADDITIVES AGGREGATED TO RS.11206.20 LACS. THE ASSESSEE HAD EXPORTED 9 PRODU CTS TO ITS VARIOUS M/S. LUBRIZOL INDIA PRIVATE LIMITED ASSESSMENT YEARS :2009-10, 2010-11 & 2012-13 6 AES. SIMILAR PRODUCTS WERE SOLD TO NON-AES IN DOME STIC AS WELL AS IN EXPORT MARKETS. ACCORDINGLY, LD. TPO, OBSERVING THE AVERAGE RATE OF THESE PRODUCTS AS SOLD TO AE AND NON-AES, CONCLUDED THAT THERE WAS DIFFERENCE IN RATES CHARGED TO AES AND NON-AES. THI S DIFFERENTIAL WORKED OUT TO BE RS.380.25 LACS IN 7 PRODUCT CATEGORIES, T HE COMPUTATION OF WHICH HAS BEEN GIVEN IN PARA-7 OF LD. TPOS ORDER. IN OTHER WORDS, CUP METHOD WAS ADOPTED TO BENCHMARK THESE TRANSACTIONS. ALTHOUGH, THE ASSESSEE, IN ITS SUBMISSIONS, ATTRIBUTED THE DIFFER ENCE IN PRICES TO QUANTIFIABLE FACTORS AS WELL A NON-QUANTIFIABLE FAC TOR, HOWEVER, THE SAME COULD NOT FIND FAVOR WITH LD. TPO WHO TERMED THE EX PLANATION TO BE VERY VAGUE SINCE THE ASSESSEE COULD NOT CARRY OUT THE EF FECTIVE QUANTIFICATION OF THE DIFFERENCES. ANOTHER PLEA THAT THE SEGMENTAL PROFIT IN AE SEGMENT WAS HIGHER THAN MARGIN ON SALES TO NON-AES WAS ALSO REJECTED SINCE THE TNMM METHOD WAS FOUND TO BE NOT JUSTIFIED. FINALLY, AFTER GRANTING AN ADJUSTMENT FOR PACKING MATERIAL @RS.6.50 PER KG, TH E DIFFERENTIAL WAS RE- WORKED TO RS.347.41 LACS AND THE SAID ADJUSTMENT WA S PROPOSED IN ITS ORDER DATED 27/11/2012.THE SAID ADJUSTMENT WAS INCO RPORATED IN DRAFT ASSESSMENT ORDER DATED 11/02/2013 WHICH WAS SUBJECT ED TO OBJECTIONS BEFORE LD. DRP. 4.5 THE LD. DRP UPHELD THE APPLICATION OF CUP METHO D TO BENCHMARK THE TRANSACTIONS IN PREFERENCE TO TNMM METHOD. THE PLEA THAT SUCH METHODOLOGY WAS ACCEPTED BY REVENUE IN AYS 2002-03 TO 2005-06 WAS REJECTED SINCE IT WAS HELD THAT PRINCIPLE OF RES-JU DICATE WOULD HAVE NO APPLICATION IN INCOME TAX PROCEEDINGS. RELIANCE WAS PLACED ON THE DIRECTIONS OF LD. DRP FOR AY 2006-07. FINALLY, THE ACTION OF LD. TPO IN M/S. LUBRIZOL INDIA PRIVATE LIMITED ASSESSMENT YEARS :2009-10, 2010-11 & 2012-13 7 SUGGESTING THE IMPUGNED ADJUSTMENT WAS UPHELD, AGAI NST WHICH THE ASSESSEE IS UNDER FURTHER APPEAL BEFORE US. 5. AS SUBMITTED BY LD. SR. COUNSEL, WE FIND THAT TH E ASSESSEES METHODOLOGY TO BENCHMARK THE STATED TRANSACTIONS WA S SUBJECT MATTER OF DISPUTE BEFORE THIS TRIBUNAL FOR AYS 2005-06 TO 200 7-08, ITA NOS. 8148/MUM/2010, 2305/MUM/2012 & 1821/MUM/2011, COMMO N ORDER DATED 20/11/2019 WHEREIN THE MATTER WAS CONCLUDED B Y THE CO-ORDINATE BENCH IN ASSESSEES FAVOR IN THE FOLLOWING MANNER: - 20. IN OUR CONSIDERED OPINION THE AFORESAID REASONI NG FULLY APPLIES TO THE FACTS OF THE PRESENT CASE. WITHOUT ANY CHANGE IN FACTS AND LAW T HE TRANSFER PRICING OFFICER HAS CHANGED THE CONSISTENTLY APPLIED TNMM METHOD TO THE CUP METHOD. WHILE DOING SO HE HAS BLANDLY HELD THAT TNMM METHOD IS NOT FULL PR OOF. FURTHERMORE, THE ASSESSEE'S OBJECTION THAT THE COMPARISON OF OTHER T RANSACTIONS HAVE TO BE CONSIDERED BY ADJUSTMENT OF VARIOUS FACTORS IS ALSO NOT FULLY DISLODGED. 21. IN THE BACKGROUND OF THE AFORESAID DISCUSSION A ND PRECEDENT WE HOLD THAT THE CHANGE IN METHOD FROM TNMM TO CUP METHOD IS NOT JUS TIFIED. HENCE, WE SET ASIDE THE ORDER OF THE ASSESSING OFFICER. ACCORDINGLY, TH E ORDER OF LEARNED CIT(A) FOR A.Y. 2005-06 IS UPHELD AND THE ORDER OF ASSESSING OFFICE R PURSUANT TO DRP DIRECTION FOR A.Y. 2006-07 AND 2007-08 IS SET ASIDE. AS IT COULD BE OBSERVED THAT COORDINATE BENCH HELD THAT CONSISTENTLY APPLIED TNMM METHOD COULD NOT BE DISREGARDED WITHOU T THERE BEING ANY CHANGE IN ANY FACTS. UPON PERUSAL OF THE SAID ORDER AND THE CASE RECORDS , WE FIND THAT FACTS ARE PARI-MATERIA THE SAME IN EARLIER AYS AS WELL AS IN AY 2009-10. IN THIS YEAR ALSO, THE ASSESSEES CONSISTENT TNMM METHODOLO GY HAS BEEN REJECTED BY LD. TPO WITHOUT ANY SOUND BASIS. ALTHOU GH THE PRINCIPLE OF RES-JUDICATE ARE NOT APPLICABLE TO INCOME TAX PROCE EDINGS, HOWEVER, THE RULE OF CONSISTENCY WOULD DEBAR THE REVENUE TO CHAN GE ITS STAND IN DIFFERENCE ASSESSMENT YEARS WITHOUT ANY SOUND BASIS , FACTS AND CIRCUMSTANCES BEING IDENTICAL. THE SAID PROPOSITION IS WELL SUPPORTED BY M/S. LUBRIZOL INDIA PRIVATE LIMITED ASSESSMENT YEARS :2009-10, 2010-11 & 2012-13 8 THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF PCIT V/S. QUEST INVESTMENT ADVISORS PVT. LTD. REPORTED IN [20 18] 409 ITR 545 WHEREIN IT HAS BEEN HELD THAT WHEN A PRINCIPLE HAS BEEN ACCEPTED BY THE REVENUE IN EARLIER YEARS AS WELL AS IN SUBSEQUENT Y EARS THEN THE REVENUE IS BOUND BY IT UNLESS THERE IS A CHANGE IN LAW OR CHANGE IN FACTS THEREIN, WHICH CHANGE HAS TO BE POINTED OUT IN THE ASSESSMENT ORDER. IN SO DOING THE JURISDICTIONAL HIGH COURT FOLLOWED THE JUDGMENT OF THE SUPREME COURT IN BHARAT SANCHAR NIGAM LTD. V/S. UNION OF INDIA REPORTED IN [2006] 282 ITR 273 WHERE THE COURT HAD DRAWN A DISTINCTION BETWEEN THE PRINCIPLE OF RES JUDICATA AND CONSISTEN CY. WE FIND THAT SIMILAR METHODOLOGY HAS BEEN ACCEPTED BY THE REVENUE FOR AYS 2008-09 & 2011-12. FURTHER, THE APPLICATION OF TNMM METHOD HAS BEEN ACCEPTED BY THE TRIBUNAL FOR AYS 2005-06 TO 20 07-08 AND NO CHANGE IN FACTS OR CIRCUMSTANCES HAS BEEN DEMONSTRA TED BEFORE US FOR THIS YEAR. THEREFORE, FOLLOWING THE RULE OF CONSIST ENCY AND THE CITED ORDER OF TRIBUNAL IN ASSESSEES OWN CASE, WE HOLD THAT TN MM METHODOLOGY AS ADOPTED BY THE ASSESSEE TO BENCHMARK THE TRANSACTIO NS WAS TO BE ACCEPTED. SINCE, THE MARGIN OF THE ASSESSEE UNDER T HIS METHOD HAVE BEEN SHOWN TO BE WITHIN ALP RANGE, THE IMPUGNED ADJ USTMENT OF RS.347.41 LACS STAND DELETED. 6. THE ONLY OTHER GROUND URGED BEFORE US IS CORRECT COMPUTATION OF INTEREST U/S 234B, 234C & 234D. FOR THIS, IT WOULD SUFFICE ON OUR PART TO DIRECT LD. AO TO COMPUTE INTEREST IN ACCORDANCE WIT H LAW. WE DIRECT SO. 7. RESULTANTLY, THE APPEAL STAND PARTLY ALLOWED TO THE EXTENT INDICATED IN THE ORDER. M/S. LUBRIZOL INDIA PRIVATE LIMITED ASSESSMENT YEARS :2009-10, 2010-11 & 2012-13 9 ITA NO. 396/MUM/2015, AY 2010-11 8.1 IT IS ACCEPTED POSITION THAT SINCE FACTS ARE SI MILAR, THE ADJUDICATION FOR AY 2009-10 WOULD APPLY WITH FULL FORCE TO AY 20 10-11 AS WELL. THE LD. TPO HAS PROPOSED SIMILAR ADJUSTMENT OF RS.229.0 0 LACS BY APPLYING CUP METHOD. THE SAME HAS BEEN UPHELD BY LD. DRP IN ITS DIRECTIONS DATED 14/10/2014. FACTS BEING PARI-MATERIA THE SAME , OUR ADJUDICATION FOR AY 2009-10 SHALL MUTATIS-MUTANDIS APPLY TO THIS YEAR ALSO. BY DELETING THE IMPUGNED TP ADJUSTMENT, THE GROUND RAI SED, IN THIS REGARD, STAND ALLOWED IN SIMILAR MANNER. 8.2 IN GROUND NO.3, THE ASSESSEE IS CONTESTING THE ADDITION OF INTEREST INCOME ON FIXED DEPOSITS FOR RS.19.93 LACS. FACTS Q UA THE SAME ARE THAT THERE WAS A DIFFERENCE OF RS.19.93 LACS IN INTEREST INCOME AS REPORTED BY THE ASSESSEE VIS--VIS INTEREST INCOME AS REFLECTED IN TDS CERTIFICATES. ACCORDINGLY, THE DIFFERENTIAL WAS ADDED TO THE INCO ME OF THE ASSESSEE. BEFORE LD. DRP, THE ASSESSEE CONTENDED THAT FOLLOWI NG CONSISTENT METHOD OF ACCOUNTING, THE DIFFERENTIAL INTEREST WAS ALREADY OFFERED TO TAX IN NEXT ASSESSMENT YEARS AND THEREFORE, THERE WAS N O LOSS TO THE REVENUE. HOWEVER, THE SAID PLEA COULD NOT FIND FAVO R WITH LD. DRP WHO UPHELD THE ACTION OF LD. AO. 8.3 BEFORE US, LD. SR. COUNSEL EXPLAINED THAT THE T ENURE OF THE FIXED DEPOSITS WAS SPREAD OVER A PERIOD OF 2 FINANCIAL YE ARS. THE INTEREST INCOME UP-TO 31/03/2010 WAS CORRECTLY ESTIMATED, ACCOUNTED FOR IN THE BOOKS AND OFFERED TO TAX WHEREAS THE BALANCE AMOUNT WAS ALREA DY OFFERED TO TAX IN AY 2011-12. THE SAME IS IN ACCORDANCE WITH MERCANTILE SYSTEM OF ACCOUNTING BEING FOLLOWED BY THE ASSESSEE. IN THIS BACKGROUND, IT WAS PLEADED THAT THE M/S. LUBRIZOL INDIA PRIVATE LIMITED ASSESSMENT YEARS :2009-10, 2010-11 & 2012-13 10 ADDITION OF RS.19.93 LACS OUGHT TO BE DELETED AS TH E SAME HAS ALREADY BEEN OFFERED TO TAX IN AY 2011-12 AND THERE WOULD O NLY BE TIMING DIFFERENCE. 8.4 UPON PERUSAL OF FINAL ASSESSMENT ORDER DATED 29 /08/2016 FOR AY 2012-13, WE FIND THAT THE ASSESSEE HAS ALREADY BEEN GRANTED CREDIT OF RS.35.83 LACS, BEING EXCESS INTEREST INCOME OFFERED BY THE ASSESSEE DURING AY 2012-13. THE SAME HAS BEEN CLAIMED ON THE PLEA THAT LD. AO HAD ADDED SHORT INCOME OF RS.19.93 LACS FOR AY 2010 -11 AND RS.32.87 LACS FOR AY 2011-12. THE SAID PLEA HAS BEEN ACCEPTE D BY LD. AO AND THE ASSESSEES INCOME HAS BEEN REDUCED BY RS.35.83 LACS IN THAT YEAR THEREFORE, WE FIND THAT RELIEF HAS ALREADY BEEN GRA NTED TO THE ASSESSEE IN AY 2012-13. CONSEQUENTLY, THIS ADDITION WOULD STAND CONFIRMED IN AY 2010-11. THE CREDIT OF TDS WOULD BE GRANTED AS PER LAW. THIS GROUND STAND DISMISSED. 8.5 THE LD. AO IS DIRECTED TO COMPUTE INTEREST IN A CCORDANCE WITH LAW. 8.6 RESULTANTLY, THE APPEAL STANDS PARTLY ALLOWED T O THE EXTENT INDICATED IN THE ORDER. ITA NO. 6667/MUM/2016, AY 2012-13 9.1 IT IS ACCEPTED POSITION THAT FACTS IN THIS YEAR ARE SIMILAR TO AY 2009-10 AND THEREFORE, THE ADJUDICATION FOR AY 2009-10 WOUL D APPLY WITH FULL FORCE TO THIS YEAR AS WELL. THE ASSESSEE HAS BEEN SADDLED WI TH TP ADJUSTMENT OF RS.491.43 LACS IN FINAL ASSESSMENT ORDER DATED 29/0 8/2016. THE SAID ADJUSTMENT IS ON SIMILAR LINES AS IN AY 2009-10. TH E LD. TPO APPLIED CUP METHOD WHICH WAS UPHELD BY LD. DRP IN ITS DIRECTION S DATED 05/07/2016. AGGRIEVED, THE ASSESSEE IS UNDER FURTHER APPEAL BEF ORE US. FACTS BEING M/S. LUBRIZOL INDIA PRIVATE LIMITED ASSESSMENT YEARS :2009-10, 2010-11 & 2012-13 11 PARI-MATERIA THE SAME, OUR ADJUDICATION FOR AY 2009 -10 SHALL MUTATIS- MUTANDIS APPLY TO THIS YEAR ALSO. BY DELETING THE I MPUGNED TP ADJUSTMENT, THE GROUND RAISED, IN THIS REGARD, STAND ALLOWED IN SIMILAR MANNER. 9.2 THE LD. AO IS DIRECTED TO COMPUTE INTEREST IN A CCORDANCE WITH LAW. 9.3 RESULTANTLY, THE APPEAL STANDS PARTLY ALLOWED T O THE EXTENT INDICATED IN THE ORDER. CONCLUSION 10. ALL THE APPEALS STAND PARTLY ALLOWED TO THE EXT ENT INDICATED IN THE ORDER. ORDER PRONOUNCED ON 27 TH JULY, 2020. SD/- SD/- (PAWAN SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 27/07/2020 SR.PS, JAISY VARGHESE ABCDEFBE / COPY OF THE ORDER FORWARDED TO : 1. MR / THE APPELLANT 2. TUMR / THE RESPONDENT 3. Z ( ) / THE CIT(A) 4. Z / CIT CONCERNED 5. [ \T] , , / DR, ITAT, MUMBAI 6. \ `AB / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.