M/s Andritz Hydro Private Limited, Bhopal V. Deputy Commissioner of Income Tax-1 (1), Bhopal

ITA 686/Ind/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8160 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 27-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: OMKAR ARJUNWADKAR A RS; MOHNISH SAINI
• Keywords: Transfer pricing; International transaction; Set aside
• Section: 271(1)(c); 143(3)

Judgement Text

[ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.686&685/IND/2017 ASSESSMENT YEARS: 2012-13 & 2013-14 ANDR ITZ HYDRO PRIVATE LIMITED D-17, INDUSTRIAL AREA MANDIDEEP-462046 NEAR BHOPAL (M.P.) INDIA / VS. DCIT - 1(1) BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. AABCV2466R APPELLANT BY SHRI MOHNISH SAINI & SHRI OMKAR ARJUNWADKAR, A.RS RESPONDENT BY SMT. ASHIMA GUPTA, CIT(DR) DATE OF HEARING: 13.03.2019 DATE OF PRONOUNCEMENT: 16.04.2019 / O R D E R PER KUL BHARAT, J.M: THESE TWO APPEALS BY THE ASSESSEE PERTAINING TO THE ASSESSMENT YEARS 2012-13 & 2013-14 ARE AGAINST DIRECTION [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 2 OF THE DISPUTE RESOLUTION PANEL-2, MUMBAI BOTH DATED 14.6.17. SIMILAR GROUNDS HAVE BEEN RAISED IN THESE APPEALS. BOTH WERE TAKEN UP TOGETHER FOR HEARING AND WE RE DISPOSED OF BY WAY OF CONSOLIDATED ORDER. FIRST WE TAKE UP APPEAL PERTAINING TO THE ASSESSMENT YEAR 2012-13 I.E. IT A NO.686/IND/2017. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. TPO/LD. AO BASED ON DIRECTIONS OF DISPUTE RESOLUTION PANEL (HON'BLE DRP): 1. ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, BY NOT ACCEPTING THE ECONOMIC ANALYSIS UNDERTAKEN BY THE A PPELLANT WHICH WAS IN ACCORDANCE WITH THE PROVISIONS OF THE ACT RE AD WITH THE RULES FOR ESTABLISHING THE ARMS LENGTH PRICE OF THE INTE RNATIONAL TRANSACTIONS. 2. ERRED IN LAW AND IN FACTS IN MAKING AN ADJUSTMENT O F INR 10,36,034 TO THE TRANSACTIONS RELATED TO CONTRACT REVENUE FR OM PROJECTS. IN DOING SO, THE LD. TPO/HON'BLE DRP ERRED IN: A) INAPPROPRIATELY REJECTING THE TRANSACTION NET MARGI N METHOD (TNMM) AS MOST APPROPRIATE METHOD AND USING COST PL US METHOD (CPM) WITHOUT PROVIDING ANY COGENT REASONS. B) NOT CONSIDERING THE INTERNAL CPM ANALYSIS SUBMITTED BY THE APPELLANT, WHICH WAS IN ACCORDANCE WITH THE PROVISI ONS OF THE ACT READ WITH THE RULES AND THE INTERNATIONALLY ACC EPTED PRINCIPLES. C) APPLYING CPM ON A PROJECT-BY-PROJECT BASIS, DESPITE AGREEING TO VARIOUS FUNCTIONAL AND RISK DIFFERENCES BETWEEN INDIVIDUAL PROJECT, WHICH WOULD LEAD TO UNRELIABLE RESULTS WHE N COMPARED ON PROJECT-BY-PROJECT BASIS. [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 3 D) NOT TAKING COGNIZANCE OF THE FACT THAT SAME INTERNA TIONAL TRANSACTION OF APPELLANT HAS BEEN ACCEPTED BY REVENUE/APPELLATE AUTHORITIES TO BE AT ARMS LENGTH IN EARLIER YEARS. E) LD. TPO/DRP HAVE ERRED IN NOT ALLOWING A SET OFF OF SURPLUS REVENUE/PROFIT EXCEEDING THE ARMS LENGTH PRICE (AL P) EARNED FROM THE OTHER PROJECTS DONE WITH AES WHILE COMPUTI NG THE ALP UNDER A TRANSACTION-BY-TRANSACTIONS ANALYSIS AP PROACH. 3. ERRED IN PROPOSING TO INITIATE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AGAINST THE APPELLANT. 2. THE FACTS IN BRIEF ARE THAT THE RETURN OF INCOME WAS FILED ON 28.11.2012 DECLARING TOTAL INCOME OF RS.22,70,51,890/-. THE CASE WAS SELECTED FOR SCRUTIN Y AND THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 196 1 (HEREINAFTER CALLED AS THE ACT) WAS COMPLETED VIDE OR DER DATED 31.3.2015 AND INCOME WAS ASSESSED AT RS.30,73,99,730/-. SUBSEQUENTLY, THIS ASSESSMENT WAS REVISED BY THE LD. PCIT BHOPAL VIDE HIS ORDER DATED 29.12.2015, THEREBY THE LD. PCIT REFERRED MATTER REL ATING TO THE TRANSFER PRICING TO THE TRANSFER PRICING OFFIC ER (TPO). THEREAFTER, THE A.O. PASSED A DRAFT ORDER ON THE BASIS OF THE RECOMMENDATION OF THE TPO FOR TRANSFER PRICING ADJUSTMENTS. THE A.O. ON THE BASIS OF THE RECOMMENDAT ION [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 4 OF THE TPO MADE ADJUSTMENTS IN RESPECT OF TRANSACTIONS RELATED TO RECEIPT OF CONTRACT REVENUE FROM PROJECTS AND ADJUSTMENT OF DIFFERENCE ON ACCOUNT OF ARMS LENGTH PR ICE FOR TRANSACTIONS RELATED TO PAYMENT OF TECHNICAL SERVIC ES TO THE ASSOCIATED ENTERPRISES (AES). TOTAL ADJUSTMENT W AS MADE OF RS.44,48,880/-. AGAINST THIS DRAFT ASSESSMENT, THE ASSESSEE PREFERRED OBJECTIONS BEFORE THE LD. DRP . LD. DRP PARTLY ALLOWED THE OBJECTIONS OF THE ASSESSEE, THE REBY THE ADJUSTMENTS MADE ON ACCOUNT OF TRANSACTIONS RELATED TO PAYMENT OF TECHNICAL SERVICES AMOUNTING TO RS.34,12,846/- ALLOWED THE OBJECTION OF THE ASSESSEE. HOWEVER, THE ADJUSTMENT MADE IN RESPECT OF DIFFERENC E ON ACCOUNT OF ARMS LENGTH PRICE FOR TRANSACTIONS RELATED T O RECEIPT OF CONTRACT REVENUE FROM PROJECTS OF RS.10,3 6,034/- WAS SUSTAINED. AGAINST THIS FINDING, ASSESSEE IS IN APP EAL. THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE FINDING OF THE LD. DRP. [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 5 3. GROUND NOS.1 & 2 ARE RELATED TO CONFIRMING THE ADJUSTMENT IN RESPECT OF TRANSACTIONS RELATED TO CONTRAC T REVENUE FROM PROJECTS. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SYNOPSIS. FOR THE SAKE OF CLARITY, WRITTEN SYNOPSIS FILED ARE REPRODUCED AS UNDER: [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 6 [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 7 [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 8 [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 9 [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 10 [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 11 [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 12 [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 13 4. ON THE CONTRARY, LD. CIT(DR) PASSED THE SUBMISSION S AND SUPPORTED THE DIRECTION OF THE LD. DRP AND THE O RDERS OF THE AUTHORITIES BELOW. LD. CIT(DR) SUBMITTED THAT THERE IS NO ILLEGALITY IN THE DIRECTION OF LD. DRP. THERE FORE, PRAYED THAT ADDITION MADE MAY BE SUSTAINED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORDS AND GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. THE LD. DRP DECIDED THE I SSUE BY OBSERVING AS UNDER: 7.1 THE PRESENT DRP HAS NOTED THAT A SIMILAR ISSUE HAD COME UP FOR CONSIDERATION OF THE DRP IN THE PRECEDING AS SESSMENT YEARS I.E. AY 2011-12 & AY 2010-11. THE DRP HAS VIDE ITS DIRECTIONS DATED 23.12.2014 FOR AY 2010-11 HAS HELD AS UNDER:- THERE IS NO DISPUTE BETWEEN THE ASSESSEE AND THE TP O AS REGARDS THE METHOD WHICH IS CPM AND BENCHMARKING WHI CH IS BASED ON INTERNAL COMPARABLE. THE ONLY DISPUTE IS THAT WH ILE THE ASSESSEE HAS AGGREGATED ALL THE PROJECTS WITH AES (THE AES ARE DIFFERENT) AND COMPARED THE MEAN CPM OF THE PROJECTS OF RELATED PA RTY TRANSACTIONS WITH THE MEAN OF THE UNRELATED PARTY TRANSACT IONS. IN CONTRAST, [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 14 [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 15 DEMONSTRATED TO BE THE MAM IN THIS CASE BY THE ASSE SSEE. THE ORDER OF THE HON'BLE ITAT HAS NOT EXAMINED CPM APPLICATION FOR B ENCHMARKING AS THIS WAS NOT THE ISSUE IN THAT YEAR. OBJECTIONS NO.2 IS THE REFORE REJECTED. 7.2 IN VIEW OF THE ABOVE DISCUSSION, THIS GROUND OF OBJECTION OF THE ASSESSEE COMPANY IS REJECTED AND NO DIRECTIONS ARE BEING ISSUED TO T HE AO/TPO. 6. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. DRP HAS NOT CONSIDERED THE FACTS IN RIGHT PERSPECTIVE. IT I S CONTENDED THAT THE LD. TPO & LD. DRP ERRED IN ADOPTIN G THE CPM (MOST APPROPRIATE METHOD) DESPITE THE FACT THAT UNDER THE IDENTICAL FACTS, THIS TRIBUNAL IN EARLIER YEAR S HAD APPROVED TNMM AS MOST APPROPRIATE METHOD. FURTHER, IT IS POINTED OUT THAT EVEN IF CPM IS APPLIED, IT HAS TO BE APPLIED ON AN AGGREGATE BASIS I.E. AN AVERAGE OF A.E. PROJECTS NEEDS TO BE COMPARED WITH AVERAGE OF NON A.E PROJECTS SINCE THE AVERAGE GROSS MARGINS EARNED BY THE APPELLANT FROM TRANSACTIONS WITH UNRELATED PARTIES RANGING FROM -210.290 TO 4549.07% AVERAGE BEING 13.1%, WHICH HAS BEEN COMPARED WITH AVERAGE GROSS MARGIN OF [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 16 TRANSACTIONS WITH A.ES RANGING FROM -72.60% TO 1075.95 % AVERAGE 32.29% GROSS OF PROJECTS APPELLANT RECOGNIZES REVENUE ON PERCENTAGE OF COMPLETION METHOD IN ACCORDA NCE WITH THE ACCOUNTING STANDARD-7. IT IS NOT POSSIBLE TO FIND A PROPER PROJECT WITH RESPECT TO ITS A.E., WHICH IS COMPLETELY WITH SIMILAR FUNCTIONALITIES TO A PROJECT, WHICH HAS BE EN UNDERTAKEN BY APPELLANT WERE A NON A.E. AS EACH PROJECT OPERATES IN A DIFFERENT LIFE CYCLE. MOREOVER, IN VIE W OF THE NATURE OF BUSINESS OF THE ASSESSEE, THE AVERAGE PROFIT ABILITY OF THE PROJECTS DEPENDS UPON VARIOUS FACTORS SUCH AS NATURE OF WORK, BIDDING PROCESS ETC. IT IS FURTHER CONTENDED THAT THE AUTHORITIES BELOW GROSSLY ERRED IN TREATING THE PROJECT WITH A.E. AS A SEPARATE TRANSACTION. FURTHER, I T IS CONTENDED THAT EVEN THE OECD GUIDELINES ARE MISCONSTRUED. IT IS FURTHER CONTENDED THAT THE FACT THAT THE ASSESSEE IS A RISK COMPARING MANUFACTURER & SUPPLIER OF POWER GENERATION EQUIPMENT AND ASSESSEE IS LIKELY TO E ARN [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 17 LOW GROSS MARGINS IN CERTAIN TRANSACTIONS BASED ON THE QUOTIENT OF RISK INVOLVED. IT IS FURTHER STATED THAT WITHOUT PREJUDICE TO SUBMISSIONS MADE, THE TPO/DRP NOT ALLOW ING SET OFF OF HIGHER GROSS MARGINS EARNED IN SOME A.E. PROJECTS AGAINST THE LOW GROSS MARGINS EARNED IN SOME A.E. PROJECTS. THE RELIANCE IS PLACED ON THE JUDGEMENT OF THE HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF SON Y MOBILE COMMUNICATION AND OTHERS IN ITA NO.16/2014. FURTHER RELIANCE IS PLACED ON THE DECISION OF THIS TR IBUNAL RENDERED IN ASSESSEES OWN CASE IN TPA NO.157/IND/201 5 & TPA 316/IND/2015, WHEREIN IT HAS BEEN HELD THAT CPM ANALYSIS AS DONE BY THE ASSESSEE COMPARING THE AVERAGE GROSS PROFIT MARGINS FROM A.E PROJECTS WITH THE AVERAG E GROSS PROFIT MARGINS FROM THE NON A.E. PROJECTS. F URTHER, IT IS STATED THAT THE ASSESSEE HAD CONDUCTED THE TP ANALYSI S USING TNMM OR IT HAS OTHER INTERNATIONAL TRANSACTIONS, WHICH SERVES AS A CORROBORATIVE ANALYSIS FOR THE [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 18 INTERNATIONAL TRANSACTIONS RELATED TO CONTRACT REVENUE EARNED FROM PROJECTS WITH AES. HE SUBMITTED THAT IN UNDERTAKING THE TNMM ANALYSIS, THE APPELLANT CHOSE ITSE LF AS TESTED PARTY AND OPERATING PROFIT AS RATIO OF OPERATING REVENUES AS A PROFIT LEVEL INDICATOR. THIS CONTENTION WAS ACCEPTED. FURTHER, IT IS SUBMITTED THAT THIS TRIBUNAL VIDE ORDER DATED 27.2.2017 PERTAINING TO THE ASSESSMENT YEAR 2010-11 & 2011-12 IN TPA NO.157/IND/2015 AND TPA 316/IND/2015 UPHELD THE CPM ANALYSIS AS DONE BY THE APPELLANT I.E. COMPARING THE AVERAGE GROSS PROFIT MARGINS FROM THE A.E PROJECTS WITH THE AVERAGE GROSS PROFIT M ARGINS FROM THE NON AE PROJECTS. WE FIND THAT THESE SUBMIS SIONS WERE ALSO MADE BEFORE THE LD. DRP AND THE LD. DRP IN ITS ORDER HAS JUST BRUSHED ASIDE THE SUBMISSIONS OF THE ASSESSEE. THE GRIEVANCES OF THE ASSESSEE ARE TWO FOLD. FIRSTLY, THE METHOD ADOPTED BY THE TPO IS WRONG AND SECONDLY WHILE APPLYING THE COST PLUS METHOD, THE TP O HAS [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 19 NOT CONSIDERED THE INTERNAL CPM ANALYSIS SUBMITTED BY THE ASSESSEE AND APPLYING CPM ON A PROJECT BY PROJECT BASIS. FURTHER, NOT CONSIDERING THE FACT THAT SOME OF THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE HAS BEEN ACCEPTED BY THE REVENUE TO BE AT ARMS LENGTH IN EARLIE R YEARS. FURTHER, LD. TPO/DRP HAVE ERRED IN NOT ALLOWIN G A SET OFF OF SURPLUS REVENUE/PROFIT EXCEEDING THE ARMS LENGTH PRICE AND FROM THE OTHER PROJECTS DONE WITH THE AES WHILE COMPUTING THE ALP UNDER A TRANSACTION BY TRANSACTION ANALYSIS. WE FIND THAT THE METHOD ADOPTED BY THE TPO WAS ALSO HELD TO BE CORRECT METHOD. THE GRIEVANCE OF ADOP TING THIS METHOD OF THE ASSESSEE FIRSTLY IS THAT IT HAS BEE N DONE WITH PROJECT TO PROJECT BASIS NOT ON THE AVERAGE OF ALL PROJECTS. AS PER THE ASSESSEE, PROJECT TO PROJECT W OULD NOT GIVE A TRUE PICTURE AS EACH PROJECT HAS ITS OWN LIFE CY CLE. SECONDLY, IT IS STATED THAT SET OFF OF SURPLUS REVENU E/PROFIT EXCEEDING THE ARMS LENGTH PRICE AND FROM THE OTHER PR OJECTS [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 20 HAS NOT BEEN GIVEN WHILE COMPUTING THE ALP UNDER A TRANSACTION BY TRANSACTION ANALYSIS. WE FIND MERIT INTO THIS CONTENTION OF THE ASSESSEE THAT LD. TPO ERRED IN COMP ARING INDIVIDUAL PROJECT MARGINS OF TRANSACTION WITH A.E. WIT H AGGREGATE MARGINS EARNED FROM TRANSACTIONS WITH NON A.E., WHICH IS IMPROPER AS INDIVIDUAL MARGINS ARE BEING COMPARED WITH AGGREGATE MARGINS THAT IS IMPERMISSIBLE UNDER LAW, THEREFORE, THE IMPUGNED ORDER IS SET ASID E. THE A.O. IS THEREFORE DIRECTED TO RE-COMPUTE ADJUSTMENT AFTER COMPARING THE MARGINS OF INDIVIDUAL TRANSACTIONS WITH A. E. WITH INDIVIDUAL TRANSACTIONS MARGINS WITH NON A.E. COMPARING THE INDIVIDUAL TRANSACTIONS WITH A.E. WITH AGGREGATE TRANSACTIONS WITH NON A.E. WOULD GIVE A DISTOR TED PICTURE OF MARGINS, HENCE, GROUND NOS.1 & 2 OF THE ASSESSEES APPEAL ARE PARTLY ALLOWED AS INDICATED HEREIN ABOVE. IT IS CLARIFIED THAT THE A.O. WOULD APPLY THE METHOD [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 21 AS DIRECTED BY LD. DRP EXCEPT THAT THE COMPARISON WOUL D BE MADE AS DISCUSSED HEREIN ABOVE. 7. GROUND NO.3 IS AGAINST INITIATION OF PENALTY U/S 271(1)(C) OF THE ACT. THIS GROUND BEING PREMATURE I S DISMISSED. 8. NOW WE TAKE UP ITA NO.685/IND/2017 FOR THE ASSESSMENT YEAR 2013-14. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. TPO/LD A.O. BASED ON DIRECTIONS OF DISPUTE RESOLUTION PANE L (HON'BLE DRP): 1. ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, BY NOT ACCEPTING THE ECONOMIC ANALYSIS UNDERTAKEN BY T HE APPELLANT WHICH WAS IN ACCORDANCE WITH THE PROVISIONS OF THE ACT READ WITH THE RULES FOR ESTABLISHING THE ARMS LENGTH PRICE O F THE INTERNATIONAL TRANSACTIONS. 2. ERRED IN LAW AND IN FACTS IN MAKING AN ADJUSTMENT O F INR 22,14,516 TO THE TRANSACTIONS RELATED TO CONTRACT REVENUE FROM PROJECTS. IN DOING SO, THE LD. TPO/HON'BLE DRP ER RED IN : A) INAPPROPRIATELY REJECTING THE TRANSACTION NET MARGI N METHOD (TNMM) AS MOST APPROPRIATE METHOD AND USING COST PL US METHOD (CPM) WITHOUT PROVIDING ANY COGENT REASONS. B) NOT CONSIDERING THE INTERNAL CPM ANALYSIS SUBMITTED BY THE APPELLANT, WHICH WAS IN ACCORDANCE WITH THE PROVISI ONS OF THE ACT READ WITH THE RULES AND THE INTERNATIONALLY ACC EPTED PRINCIPLES. C) APPLYING CPM ON A PROJECT-BY-PROJECT BASIS, DESPITE AGREEING TO VARIOUS FUNCTIONAL AND RISK DIFFERENCES BETWEEN INDIVIDUAL PROJECT, WHICH WOULD LEAD TO UNRELIABLE RESULTS WHE N COMPARED ON PROJECT-BY-PROJECT BASIS. D) NOT TAKING COGNIZANCE OF THE FACT THAT SAME INTERNA TIONAL TRANSACTION OF APPELLANT HAS BEEN ACCEPTED BY [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 22 REVENUE/APPELLATE AUTHORITIES TO BE AT ARMS LENGTH IN EARLIER YEARS. E) LD. TPO/DRP HAVE ERRED IN NOT ALLOWING A SET OFF OF SURPLUS REVENUE/PROFIT EXCEEDING THE ARMS LENGTH PRICE (AL P) EARNED FROM THE OTHER PROJECTS DONE WITH AES WHILE COMPUTI NG THE ALP UNDER A TRANSACTION BY TRANSACTIONS ANALYSIS AP PROACH. 3. ERRED IN PROPOSING TO INITIATE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AGAINST THE APPELLANT. 9. THE GROUNDS ARE IDENTICAL AS WERE IN ITA NO.686/IND/2017 PERTAINING TO THE ASSESSMENT YEAR 2012-13. PARTIES HAVE ADOPTED SAME ARGUMENT. THEREFORE , FOR THE SAME REASONS, IMPUGNED ORDER IS SET ASIDE. TH E ASSESSING OFFICER IS DIRECTED TO RE-COMPUTE ADJUSTMEN T IN THE LIGHT OF THE DIRECTION GIVEN IN ITA NO.686/IND/ 2017. 10. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE A RE PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 16 . 04.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 16/04/2019 VG/SPS [ITA 685 & 687/IND/2017] [ANDRITZ HYDRO PRIVATE LIMITED, MANDIDEEP, BHOPAL] 23 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE