Motonic India Automotive Pvt. Ltd., Thiruvallur V. ACIT, CHENNAI

ITA 741/CHNY/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8841 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 02-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 26-03-2014
• Court: TRIBUNAL
• Department Lawyers: ARUN C BHARATH
• Keywords: Transfer pricing; Reasonable cause
• Section: 234B; 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , . ' # , $ #% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER . /ITA NO. 741/MDS/2014 / ASSESSMENT YEAR : 2009-10 MOTONIC INDIA AUTOMOTIVE PVT. LTD., NO.200/5A, 5B, 10 &11, VAYALUR VILLAGE, SURKAURAM ROAD, THIRUVALLUR TALUK, DISTRICT 602015, TAMIL NADU PAN AAFCM3603F ( /APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-IV(3), CHENNAI - 34. RESPONDENT) / APPELLANT BY : SHRI VIKRAM VIJAYARAGHAVAN, ADVOCATE / RESPONDENT BY : SHRI ARUN C. BHARATH, CIT ! / DATE OF HEARING : 02.08.2016 '# ! / DATE OF PRONOUNCEMENT : 17.08.2016 & / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE TRANSFER PRICING OFFICER(TPO) PASSED U /S.92CA(3) OF - - ITA 741/14 2 THE ACT DATED 21.1.2013 CONSEQUENT TO THE DIRECTION S OF THE DRP U/S.144C(5) OF THE ACT, DATED 20.12.2013. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE ASSISTANT COMMISSIONER OF INCO ME- TAX, CHENNAI (AO) DATED 21 JANUARY 2014(RECEIVED ON 31 JANUARY 2014) AND THE DIRECTIONS OF DISPUTE RESOLUTION PANEL OF INCOME TAX DATED 20 DECEMBER 2013 (RECEIVED ON 02 JANUARY 2014) IS ERRONEOUS, BA D IN LAW, PREJUDICIAL TO THE APPELLANT AND CONTRARY TO T HE FACTS & CIRCUMSTANCES OF THE CASE. 2. THE LEARNED TPO/LEARNED AO/HONBLE DRP HAS ERRE D IN REJECTING THE ECONOMIC ANALYSIS UNDERTAKEN BY TH E APPELLANT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT READ WITH THE RULES AND MAKING AN UPWARD ADJUSTMENT OF INR 27,368,690/- TO THE TOTAL INCOME OF THE APPELLA NT BY RE-DETERMINING THE ARMS LENGTH PRICE OF INTERNATIO NAL TRANSACTION BY CHARACTERIZING MOTONIC INDIA AS DIST RIBUTOR. 3. THE LEARNED TPO/LEARNED AO/HONBLE DRP HAS ERRE D IN NOT TAKING COGNIZANCE OF THE MARKET PENETRATION STRATEGY ADOPTED BY ASSESSEE. 4. THE LEARNED TPO/LEARNED AO/HONBLE DRP HAS ERRE D IN REJECTING THE CUSTOM DUTY ADJUSTMENT UNDERTAKEN BY THE APPELLANT. 5. THE LEARNED AO HAS ERRED IN LEVYING THE INTERES T AMOUNTING TO INR 48,97,810 UNDER SECTION 234B OF TH E ACT DESPITE THE FACT THAT THE ADDITIONS TO INCOME W ERE UN- ANTICIPATED AND THERE WOULD BE CONSEQUENTIAL REDUCT ION IN THE INTEREST IF THE ISSUES UNDER THE APPEAL ARE ALL OWED. 6. THE LEARNED AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS UNDER 271(1)(C) OF THE ACT DESPITE THE FACT THAT THE ADDITIONS TO INCOME WERE ARISING OUT OF DI FFERENCE OF OPINION WITH RESPECT TO TRANSFER PRICING MATTERS AND THE - - ITA 741/14 3 LEARNED AO HAS NOT DEMONSTRATED THAT THE ASSESSEE H AS CONCEALED THE PARTICULARS OF INCOME IN HIS ORDER. 7. THE LEARNED TPO/HONBLE DRP HAS ERRED IN LAW ON NOT ADJUDICATED ON WORKING CAPITAL ADJUSTMENT PERFORMED BY APPELLANT TO ELIMINATE THE DIFFERENCES IN RECEIVABL ES, INVENTORY AND PAYABLES WHICH IS DUE TO THE DIFFEREN CE IN THE WORKING CAPITAL CYCLE OF THE APPELLANT AND THE COMPARABLE COMPANIES. 8. THE LEARNED TPO, AO AND DRP HAVE ERRED, IN LAW AND IN FACTS, BY DETERMINING THE ARMS LENGTH MARGIN/PR ICE USING ONLY FY 2008-09 DATA WHICH WAS NOT AVAILABLE TO THE ASSESSEE AT THE TIME OF COMPLYING WITH THE TRAN SFER PRICING DOCUMENTATION REQUIREMENTS. 9. THE LEARNED TPO HAS ERRED IN NOT ALLOWING THE B ENEFIT UNDER THE PROVISO TO SECTION 92C(2) OF THE ACT. 3. AT THE TIME OF HEARING, THE LD. AR SUBMITTED THA T THE ASSESSEE DID NOT PRESS THESE GROUNDS. HOWEVER, IT HAS THE RIGHT TO PURSUE THESE GROUNDS, IF THE SITUATION WARRANTS AFTER CONSIDERING GIVING EFFECT TO THE PRESENT TRIBUNALS ORDER BY THE LOWER AUTHORITIES. THEREFORE, WE DISMISS THESE GRO UNDS OF APPEAL AS NOT PRESSED BY OBSERVING THAT THE ASSESSE E IS AT LIBERTY TO FILE AN APPEAL AFTER CONSIDERING GIVING EFFECT TO THE PRESENT TRIBUNALS ORDER. ACCORDINGLY, THESE GROUN DS ARE DISMISSED. 4. THE ASSESSEE HAS RAISED THE FOLLOWING ADDITIO NAL GROUNDS : - - ITA 741/14 4 A) THE TPO/DRP OUGHT TO HAVE APPRECIATED THAT THE APPELLANT IS SELLING ITS PRODUCT(S) TO UNCONNECTED PARTY ON THE BASIS OF THE PRICE NEGOTIATED & DECIDED BY THE UNCONNECTED PARTY AND CONSEQUENTLY THE COST OF IMPO RT FROM AE CANNOT BE ADJUSTED TO CORRESPOND TO THE SAL E PRICE TO UNCONNECTED THIRD PARTY. THUS, THE TPO/DRP OUGHT TO HAVE ACCEPTED THE PURCHASE PRICE FROM THE AE AS AT ARMS LENGTH. B) THE TPO/DRP OUGHT TO HAVE APPRECIATED THAT AT TH E EXCHANGE RATE PREVAILING AT THAT TIME OF ENTERING I NTO THE AGREEMENT WITH THE UNCONNECTED PARTY THE APPELLANT WOULD HAVE MADE PROFIT ON SALE OF ITS PRODUCT(S) TO SAID THIRD PARTY. HOWEVER DUE TO ECONOMIC CONDITIONS, RESULTING IN ADVERSE FOREIGN EXCHANGE RATES, WHICH WAS BEYOND THE CONTROL OF THE APPELLANT, THE APPELLANT HAD TO INCUR LOSSES. THE AE OF THE APPELLANT CANNOT BE AC CEPTED TO BEAR THE FOREIGN EXCHANGE LOSS OF THE INDIAN ECO NOMY AND HENCE RATE AGREED FOR PURCHASE FROM THE AE OF T HE APPELLANT IN DOLLAR TERMS SHOULD BE ACCEPTED AS ALP , I.E. LOSS ON ACCOUNT OF EXCHANGE FLUCTUATION SHOULD BE EXCLUDED WHILE DETERMINING THE ALP. C) THE TPO/DRP OUGHT TO HAVE APPRECIATED THAT THE APPELLANT WHILE INTRODUCING THEIR PRODUCT(S) TO UNCONNECTED PARTY HAS TO PENETRATE THE MARKET, COMP ETE WITH THE LOCAL MANUFACTURERS AND THUS REQUIRED THE APPELLANT TO QUOTE COMPETITIVE PRICES WHILE ALSO MA TCHING THE SCHEDULE OF THE UNCONNECTED PARTY THEREBY REQUI RING FOLLOWING EXTRAORDINARY EXPENSES TO BE BORNE BY APP ELLANT WHICH OUGHT TO HAVE BEEN EXCLUDED IN ITS ALP: B.1) CUSTOMS DUTY BORNE BY THE APPELLANT TO SUIT SU PPLY & QUALITY PARAMETERS LAID DOWN BY UNCONNECTED PART CONSTITUTE EXTRAORDINARY EXPENSES WHICH SHOULD NOT BE TAKEN INTO ACCOUNT FOR THE PURPOSE OF DETERMINING T HE ALP. B.2) AIR-FREIGHT EXPENSES BORNE BY APPELLANT TO IMP ORT CERTAIN CONSIGNMENT FROM THE AE TO SUIT THE - - ITA 741/14 5 MANUFACTURING SCHEDULE OF THE UNCONNECTED PARTY CONSTITUTE EXTRAORDINARY, UNANTICIPATED EXPENSES WH ICH SHOULD BE EXCLUDED WHILE COMPUTING THE ALP. 5. THE ASSESSEE HAS ALSO FILED PETITION FOR ADMISSI ON OF ADDITIONAL GROUNDS STATING THAT THESE GROUNDS ARE E MANATING FROM THE ORDER OF THE LOWER AUTHORITIES AND INADVER TENTLY, THE ASSESSEE HAS OMITTED TO RAISE THESE SPECIFIC GROUND S RELEVANT TO THE DETERMINATION OF COMPARABLE ALP. CONSIDERING T HE BONA FIDE EXPLANATION GIVEN BY THE ASSESSEE, WE ARE OF THE OP INION THAT THERE EXISTS A REASONABLE CAUSE IN NOT FILING THE G ROUNDS ORIGINALLY BEFORE THE TRIBUNAL. ACCORDINGLY, THESE GROUNDS ARE ADMITTED FOR ADJUDICATION. 6. THE LD. AR SUBMITTED THAT IN RESPECT OF CUSTOM D UTY COMPONENT SUITABLE ADJUSTMENT TO BE MADE WHILE DETE RMINING THE ALP. IN OUR OPINION, THE PLEA OF THE ASSESSEE IS JUSTIFIED. THE TPO HAS NOT CONSIDERED THE CUSTOM DUTY ADJUSTME NT ON THE REASON THAT IT IS EQUIVALENT TO CENTRAL EXCISE IN C OMMERCIAL MARKET. THIS IS NOT CORRECT. THE TRIBUNAL CONSIST ENTLY HOLDING THAT WHILE DETERMINING ALP, THERE SHOULD BE SUITABL E ADJUSTMENT IN RESPECT OF CUSTOM DUTY, WHICH WAS CONSIDERED IN THE FOLLOWING CASES : - - ITA 741/14 6 I) SKODA AUTO INDIA (P) LTD. V. ACIT, AURANGABAD (3 0 SOT 319)[PUNE] II) TOYOTA KIRLOSKAR MOTORS PVT. LTD. V. ACIT, BAN GALORE ITA NO. 828/BANG/2010 III) PUTZMEISTER CONCRETE MACHINES PVT. LTD. V. DCI T, PANAJI ITA NO. 107/PNJ/2012 IV) DEMAG CRANES & COMPONENTS (INDIA) PVT. LTD. V. DCIT, PUNE IN ITA NO.120/PN/2011 6.1 AT THIS STAGE, IT IS PERTINENT TO MENTION THE F INDING OF THE PUNE BENCH IN THE CASE OF DEMAG CRANES & COMPONENTS (INDIA) PVT. LTD. V. DCIT(SUPRA) DATED 4.1.2012 IN ITA NO.1 20/PN/2011, WHICH IS AS FOLLOWS : 37. WE HAVE HEARD THE PARTIES AND PERUSED THE AVAIL ABLE MATERIAL ON RECORDS IN THE LIGHT OF THE SECOND LIMB OF THE GROUND 4(B). IT IS RELEVANT MENTIONED THAT WE HAVE ALREADY ANALYSED THE RELEVANT PROVISIONS OF INCOME TAX RULE S VIS A VIS THE SCOPE OF THE ADJUSTMENTS IN THE PRECEDING PARAG RAPHS IN THE CONTEXT OF THE ADJUSTMENTS ON ACCOUNT OF THE W ORKING CAPITAL. IN PRINCIPLES, OUR FINDINGS ON THE ISSUE REMAIN APPLICABLE TO THE ADJUSTMENTS ON ACCOUNT OF THE IMP ORT COST MENTIONED IN GROUND 4(B) TOO. THE DIFFERENCE BETWEE N THE AL MARGIN BEFORE AND AFTER THE SAID ADJUSTMENTS ON ACC OUNT OF IMPORT COST WORKS OUT TO 0.57% (7.18%-6.61%). REV ENUE HAS NOT DISPUTED THE SAID WORKING OF THE ASSESSEE. IN T HESE FACTUAL CIRCUMSTANCES AND IN THE LIGHT OF THE SCOPE OF ADJU STMENTS DISCUSSED ABOVE, IN OUR OPINION AND IN PRINCIPLE, T HE ASSESSEE SHOULD WIN ON THIS GROUND TOO. ONE SUCH DECISION RE LIED UPON BY THE ASSESSEES COUNSEL SUPPORTS OUR FINDING RELA TES TO THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF SKODA AUTO INDIA P LTD 122 TTJ 699 (PUNE) DATED MARCH 200 9 WHEREIN, IT IS HELD (IN PARA 19 OF THE ORDER) THAT, - - - ITA 741/14 7 NO DOUBT , A HIGHER IMPORT CONTENT OF RAW MATERIAL BY ITSELF DOES NOT WARRANT AN ADJUSTMENT IN OPERATING MARGINS, AS WAS HELD IN SONY INDIA (P) LTD.S CASE (SUPRA), BUT WHAT IS TO BE REALLY SEEN IS WHETHER T HIS HIGH IMPORT CONTENT WAS NECESSITATED BY THE EXTRAORDINAR Y CIRCUMSTANCES BEYOND ASSESSEES CONTROL. AS WAS OBSERVED BY A CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF E-GAIN COMMUNICATION (P) LTD. (SUPRA) THE DIFFERENCES WHICH ARE LIKELY TO MATERIALLY AFFECT T HE PRICE, COST CHARGED OR PAID IN, OR THE PROFIT IN THE OPEN MARKET ARE TO BE TAKEN INTO CONSIDERATION WITH THE IDEA TO MAKE REASONABLE AND ACCURATE ADJUSTMENT TO ELIMINATE THE DIFFERENCES HAVING MATERIAL EFFECT. WE DO NOT AGRE E WITH THE AO THAT EVERY TIME THE ASSESSEE PAYS THE HIGHER IMPORT DUTY, IT MUST BE PASSED ON TO THE CUSTOMERS OR IT MUST BE ADJUSTED FOR IN NEGOTIATING THE PURCHASING PRICE. ALL THESE THINGS COULD BE RELEVANT ONLY WHEN HIGHER IMPORT CONTENT IS A PART OF THE BUSINESS MODEL WHICH THE ASSESSEE HAS CONSCIOUSLY CHOSEN BUT THEN IF IT IS A BUSINESS MODEL TO IMPORT THE SKD KITS OF THE CARS, ASSEMBLE IT AND SELL IT IN THE MARKET, THAT IS CERT AINLY NOT THE BUSINESS MODELS OF THE COMPARABLES THAT THE TPO HAS ADOPTED IN THIS CASE. THE ADJUSTMENTS THEN ARE REQUIRED TO BE MADE FOR FUNCTIONALLY DIFFERENCES. T HE OTHER WAY OF LOOKING AT THE PRESENT SITUATION IS TO ACCEP T THAT BUSINESS MODEL OF THE ASSESSEE COMPANY AND THE COMPARABLE COMPANIES ARE THE SAME AND IT IS ON ACCO UNT OF INITIAL STAGES OF BUSINESS THAT THE UNUSUALLY HI GH COSTS ARE INCURRED. THE ADJUSTMENTS ARE THUS REQUIRED EIT HER WAY. IT IS, THEREFORE, PERMISSIBLE IN PRINCIPLE TO MAKE ADJUSTMENTS IN THE COSTS AND PROFITS IN FIT CASES. WE ALSO DO NOT AGREE WITH THE AUTHORITIES BELOW THAT THE O NUS IS ON THE ASSESSEE TO GET ALL SUCH DETAILS OF THE COMP ARABLE CONCERNS SO AS TO MAKE THIS COMPARISON POSSIBLE. TH E ASSESSEE CANNOT BE EXPECTED TO GET THE DETAILS AND PARTICULARS WHICH ARE NOT IN PUBLIC DOMAIN. IN SUC H A SITUATION, I.E. WHEN INFORMATION AVAILABLE IN PUBLI C DOMAIN IS NOT SUFFICIENT TO MAKE THESE COMPARISONS POSSIBL E, IT IS INEVITABLE THAT SOME APPROXIMATIONS ARE TO BE MADE AND REASONABLE ASSUMPTIONS ARE TO BE MADE. THE ARGUMENT - - ITA 741/14 8 BEFORE US WAS THAT IT WAS FIRST YEAR OF ASSESSEES OPERATIONS AND COMPLETE FACILITIES ENSURING A REASO NABLE INDIGENOUS RAW MATERIAL CONTENT WAS NOT IN PLACE. T HE ASSESSEES CLAIM IS THAT IT WAS IN THESE CIRCUMSTAN CES THAT THE ASSESSEE HAD TO SELL THE CARS WITH SUCH HI GH IMPORT CONTENTS, AND ESSENTIALLY HIGH COSTS, WHILE THE NORMAL SELLING PRICE OF THE CAR WAS COMPUTED IN THE LIGHT OF THE COSTS AS WOULD APPLY WHEN THE COMPLETE FACIL ITIES OF REGULAR PRODUCTION ARE IN PLACE. NONE OF THESE ARGU MENTS WERE BEFORE ANY OF THE AUTHORITIES BELOW. WHAT WAS ARGUED BEFORE THE AO WAS MERE FACT OF HIGHER COSTS ON ACCOUNT OF HIGHER IMPORT DUTY BUT THEN THIS ARGUMEN T PROCEEDED ON THE FALLACY THAT AN OPERATING PROFIT M ARGIN FOR HIGHER IMPORT DUTY IS PERMISSIBLE MERELY BECAUS E THE HIGHER COSTS ARE INCURRED FOR THE INPUTS. THAT ARGU MENT HAS BEEN REJECTED BY A CO-ORDINATE BENCH AND WE ARE IN RESPECTFUL AGREEMENT WITH THE VIEWS OF OUR ESTEEMED COLLEAGUES. THIS ADDITIONAL ARGUMENT WAS NOT AVAILA BLE BEFORE THE AUTHORITIES BELOW AND IT WILL INDEED BE UNFAIR FOR US TO ADJUDICATE ON THIS FACTUAL ASPECT WITHOUT ALL OWING THE TPO TO EXAMINE ALL THE RELATED RELEVANT FACTS. WE, THEREFORE, DEEM IT FIT AND PROPER TO REMIT THIS MATTER TO THE FILE OF THE TPO FOR FRESH ADJUDICATION IN THE LIGHT OF OUR ABOVE OBSERVATIONS. 38. THE PERUSAL OF THE IMPUGNED ORDERS SHOWS THAT T HE ABOVE CITED GUIDELINES BY WAY OF DECISION OF THIS B ENCH OF THE TRIBUNAL IN THE CASE OF SKODA AUTO INDIA P LTD (SUPRA) WERE NOT AVAILABLE TO THE REVENUE AUTHORITIES. THER EFORE, WE ARE OF THE OPINION, THE ISSUE SHOULD BE SET ASIDE T O THE FILES OF THE TPO WITH DIRECTION TO EXAMINE THE CLAIM OF T HE ASSESSEE RELATING TO THE IMPORT COST FACTOR AND ELI MINATE THE DIFFERENCE IF ANY. HOWEVER, THE TPO/AO/DRP SHALL SE E TO IT THAT THE DIFFERENCE IN QUESTION IS LIKELY TO MATER IALLY AFFECT THE PRICE/PROFIT IN THE OPEN MARKET AS ENVISAGED IN SUB RULE (3) OF RULE 10B OF THE INCOME TAX RULES, 1962. ACCO RDINGLY, GROUND 4(B) IS ALLOWED PRO TANTO. - - ITA 741/14 9 ACCORDINGLY, WE DIRECT THE A.O. TO GIVE SUITABLE AD JUSTMENT AGAINST THE CUSTOM DUTY COMPONENT WHILE DETERMINING THE ALP. 7. THE NEXT ADDITIONAL GROUND IS WITH REGARD TO AIR FREIGHT CHARGES ADJUSTMENT WHILE COMPUTING THE ALP. IN OUR OPINION, THE ASSESSEE IS IN THE FIELD OF MANUFACTUR ING AND TESTING OF THROTTLE BODY, ROCKER ARM, SOLENOID VALV E, LPG GAS MIXER, VAPORIZER, LPG TANK ETC. AND THE ASSESS EE HAS TO TRANSPORT THE RAW MATERIALS VERY URGENTLY TO MEE T THE END OF THE CUSTOMERS. THE ASSESSEE IS IMPORTING THE EN TIRE VARIOUS COMPONENTS WHICH IS REQUIRED TO MANUFACTURE ITS FINAL PRODUCTS. IN THE COURSE, IT INCURRED AIR FRE IGHT CHARGES, WHICH IS ABNORMAL EXPENSES AND ADJUSTMENTS TO BE MA DE WHILE DETERMINING THE ALP, AS IT IS AFFECTING THE O PERATING PROFITS. THE PLEA OF THE ASSESSEE IS TO BE ACCEPTE D, MORE SO, THERE IS A BINDING DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF TRANSWITCH INDIA PVT. L TD. V. DCIT IN ITA NO.6083/DEL/2010 FOR THE ASSESSMENT YEA R 2006-07, WHEREIN THE ADJUSTMENTS TOWARDS ABNORMAL EXPENSES INCURRED BY THE ASSESSEE TO BE CONSIDERED WHILE - - ITA 741/14 10 DETERMINING THE ALP. ACCORDINGLY, WE DIRECT THE TP O TO CONSIDER THE SAME WHILE DETERMINING THE ALP. 8. THE NEXT GROUND IS WITH REGARD TO VARIATION IN EXCHANGE RATE ADJUSTMENT WHILE DETERMINING THE ALP. ACCORDING TO THE LD. AR, THE ASSESSEE ENTERED INTO CONTRACT IN ADVERSE PRICES FIXED ON THE PREVAILING EXCHANGE RATE AND DUE TO FLUCTUATION IN EXCHANGE RATE, THERE IS LOSS AND THAT EXCHANGE FLUCTUATION TO BE CONSIDERED WHILE DETERMI NING THE ALP. 9. WE FIND FORCE IN THE ARGUMENT OF THE LD. AR. IT IS NORMAL THAT EXCHANGE RATE IS SUBJECT TO FLUCTUATION DUE TO ECONOMIC CONDITIONS. WHILE DETERMINING THE ALP, ON E HAS TO CONSIDER THESE FACTORS, MORE SO, OUR VIEW IS FOR TIFIED BY THE DECISION OF THE TRIBUNAL IN THE CASES OF HONDA TRADING CORP. INDIA PVT. LTD. V. ACIT IN ITA NO.5297/DEL/20 11 FOR THE ASSESSMENT YEAR 2007-08 AND DHL EXPRESS (INDIA) PVT. LTD. V. ACIT IN ITA NO.7360/MUM/2010 FOR THE ASSESS MENT YEAR 2006-07. ACCORDINGLY, WE DIRECT THE TPO TO PR OVIDE CONSIDERABLE EXCHANGE FLUCTUATION ADJUSTMENT WHILE DETERMINING THE ALP. ACCORDINGLY, THIS ISSUE IS RE MITTED TO - - ITA 741/14 11 THE FILE OF THE TPO FOR DETERMINING THE ALP AFTER CONSIDERING THE ABOVE THREE COMPONENTS I.E. CUSTOMS DUTY ADJUSTMENT, AIR FREIGHT ADJUSTMENT AND FOREIGN EXCH ANGE FLUCTUATION ADJUSTMENT. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 17 TH OF AUGUST, 2016 AT CHENNAI. SD/- SD/- ( $% & ) ( ' ( ) $ ) *%+,-,./01,2345,.62,+778,293 : ;< /JUDICIAL MEMBER ! ;<=>>70.?,.?@A1BA2 ': /CHENNAI, C; /DATED, THE 17 TH AUGUST, 2016. MPO* ;D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H3 /CIT(A) 4. H /CIT 5. FIJ K /DR 6. JLM /GF.