VISHAY SEMICONDUCTOR INDIA P.LTD ( FORMERLY KNOWN AS VISHAY SEMICONDUCTOR INDIA LTD ), MUMBAI V. ASST CIT CIR 8(3), MUMBAI

ITA 7503/MUM/2012

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7242 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Next Hearing Date: 26-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 19-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYANT KUMAR LD
• Assessee Lawyers: F V IRANI LD
• Keywords: Depreciation; Transfer pricing; International transaction; Rule of consistency; Revised return
• Section: 143(3)

Judgement Text

ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.7503/MUM/2012 ( / ASSESSMENT YEAR: 2008-09) VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED (FORMERLY KNOWN AS VISHAY SEMICONDUCTOR INDIA LIMITED SDF-I, UNIT NO. 23, SEEPZ, ANDHERI(EAST) MUMBAI-400 096 ASSISTANT COMMISSIONER O F INCOME TAX RANGE-8(3) ROOM NO.204 AAYKAR BHAVAN, M.K.ROAD MUMBAI 400 020 ./ ./PAN/GIR NO. AAACS-6827-Q ( /APPELLANT ) : ( !' / RESPONDENT ) ASSESSEE BY : F.V.IRANI, LD. AR REVENUE BY : JAYANT KUMAR, LD. CIT DR / DATE OF HEARING : 11/04/2018 / DATE OF PRONOUNCEMENT : 04/05/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2008-09 CONTEST THE FINAL ASSESSMENT ORDER PASSED BY LD. ASSISTANT COMMISSIONER OF INCOME TAX-CIRCLE 8(3), MUMBAI [AO] U/S 143(3) READ WITH SECTION 144C PURSUANT TO THE DIRECTIONS OF LD. DISPUTE RESOLUTION ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 2 PANEL [DRP]. DURING HEARING , THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL HAVE BEEN URGED BEFORE US: - I. GROUNDS OF OBJECTIONS IN RESPECT OF TRANSFER PRI CING ADJUSTMENT .. 4.GROUND OF OBJECTION 4- REJECTION OF CERTAIN COMPA NIES IDENTIFIED BY THE APPELLANT IN THE TRANSFER PRICING REPORT ERRED IN REJECTING CERTAIN COMPARABLE COMPANIES FRO M THE SET OF COMPARABLE IDENTIFIED BY THE APPELLANT IN ITS TRANSFER PRICING REPORT 5.GROUND OF OBJECTION 5- NON CONSIDERATION OF CORRE CT OPERATING MARGINS OF COMPARABLE COMPANIES ADOPTED IN THE TP ORDER ERRED IN CONSIDERING INCORRECT OPERATING MARGIN OF COMPARABLE COMPANIES ADOPTED IN THE ORDER 6.GROUND OF OBJECTION 6- NON EXCLUSION OF PROVISION FOR INVENTORY OBSOLESCENCE FROM THE OPERATING COST OF THE APPELLA NT. ERRED ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW BY NOT EXCLUDING INR 61,825,865/- PERTAINING TO PROVISION FOR INVENTORY OBSOLESCENCE (BEING NON-OPERATING IN NATURE) FROM THE OPERATING COST OF THE APPELLANT FOR AY 2008-09 7.GROUND OF OBJECTION 7-TREATING LOSS ON SALE OF FI XED ASSETS AS OPERATING IN NATURE FOR THE PURPOSE OF COMPUTING OPERATING MARGI NS OF THE APPELLANT ERRED IN TREATING INR 3,905,868 PERTAINING TO LOSS ON SALE OF FIXED ASSETS AS OPERATING IN NATURE FOR THE PURPOSE OF COMPUTING OP ERATING MARGINS OF VSIPL FOR AY 2008-09, AND ACCORDINGLY NOT CONSIDERING CORRECT OP ERATING MARGIN OF VSIPL 8.GROUND OF OBJECTION 8-NON-CONSIDERATION OF RISK A DJUSTMENT ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW BY COMPARING FULL- FLEDGED RISK BEARING ENTITIES WITH THE APPELLANT, W ITHOUT MAKING ANY ADJUSTMENT ON ACCOUNT OF DIFFERENCES BETWEEN THE RISK PROFILE OF COMPARABLE COMPANIES VIS--VIS THE APPELLANT. 9.GROUND OF OBJECTION 9- TRANSFER PRICING ADJUSTMEN T WITHOUT GIVING BENEFIT OF +/-5 PER CENT AS AVAILABLE UNDER ERSTWHILE PROVISO TO SECTION 92C(2) ERRED IN COMPUTING THE ARMS LENGTH PRICE AS THE ME AN ARMS LENGTH PRICE DETERMINED, WITHOUT TAKING INTO ACCOUNT THE LOWER 5 PERCENT VARIATION FROM THE MEAN ARMS LENGTH PRICE DETERMINED II. GROUNDS OF OBJECTIONS IN RESPECT OF DISALLOWANC ES/ADDITIONS OTHER THAN TRANSFER PRICING ADJUSTMENT 11. GROUND OF OBJECTION 11- NON CONSIDERATION OF AD DITIONAL DEDUCTION ON ACCOUNT OF DEPRECIATION ON PROJECTOR AND NOT GRANTI NG OF RELIEF FOR DISALLOWANCE OF PROVISIONS IN EARLIER YEAR ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW BY NOT GRANTING ADDITIONAL DEDUCTION ON ACCOUNT OF DEPRECIATION ON PROJECTOR (AS A RESULT OF APPROACH FOLLOWED IN ASSESSMENT PROCEEDINGS FOR AY 2004-05) AMOUNTING TO RS.6,851 AND NOT GRANTING RELIEF FOR DISALLOWANCE OF PROVISIONS DISA LLOWED IN EARLIER YEAR AMOUNTING TO RS.27,92,198. 2.1 FACTS IN BRIEF ARE THAT ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED IN MANUFACTURING AND TRADING OF SEMICONDUCTOR DEVICES ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 3 INCLUDING DIP BRIDGE RECTIFIERS WAS ASSESSED U/S 143(3) AT RS.23.76 CRORES AFTER CERTAIN TRANSFER PRICING [TP] ADJUSTMENT OF RS.16.13 CRORES & STOCK OBSOLESCENCE ADJUSTMENT OF RS.2.58 CRORES AS AGAINST REVISED RETURNED INCOME OF RS.5.04 CRORES E-FILED BY THE ASSESSEE ON 29/03/2010. THE PRIMARY SUBJECT MATTER OF THIS APPE AL IS TP ADJUSTMENT MADE IN THE COMPUTATION OF INCOME. 2.2 DURING ASSESSMENT PROCEEDINGS, THE INTERNATIONAL TRANSACTIONS CARRIED OUT BY THE ASSESSEE WITH ITS ASSOCIATED ENTERPRISES [AE] AS REPORTED IN FORM 3CEB WERE REFERRED FOR DETERMINATION OF ARMS LENGTH PRICE [ALP] U/S 92CA(1) TO LD. TRANSFER PRICING OFFICER [TPO] ON 12/05/2010. THE ISSUE UNDER APPEAL IS RELATED WITH DETERMINATION OF ALP OF GOODS EXPORTED BY THE ASSESSEE AMOUNTING TO RS.8 6.73 CRORES (NET OF SALES RETURN) TO ITS AE SITUATED IN ITALY . MAJORITY OF THE SALE TURNOVER ACHIEVED BY THE ASSESSEE IN THE IMPUGNED AY WAS BY WAY OF EXPORT TO ITS AE SITUATED IN ITALY . 2.3 THE ASSESSEE ADOPTED TRANSACTIONAL NET MARGIN METHOD [TNMM] METHOD TO BENCHMARK THESE TRANSACTIONS WITH OPERATING PROFIT / TOTAL COST [OP/TC] AS THE PROFIT LEVEL INDICATOR [PLI], THE ASSESSEE BEING THE TESTED PARTY. THE ASSESSEES PLI CAME TO 6.90% AS AGAINST MEAN PLI OF 9.49% OF 15 COMPARABLES AS SELECTED BY THE ASSESSEE IN ITS TP STUDY AND THEREFORE, THE SAME BEING WITHIN THE TOLERANCE RANGE OF +/-5%, THE TRANSACTIONS WERE CLAIMED TO BE AT ARMS LENGTH PRICE [ALP] . THE PRIME DISPUTE UNDER APPEAL IS RELATED WITH COMPUTATION OF CORRECT PLI REFLECTED BY THE ASSESSEE AND SELECTION / REJECTION OF CERTAI N COMPARABLES. 2.4 AS NOTED BY LD. TPO, THE ASSESSEE WAS ENGAGED I N THE BUSINESS OF LABOR ASSISTED ASSEMBLY PROCESS OF SEMI-CONDUCTOR D EVICES OF ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 4 DIFFERENT TYPES WHICH WERE MAINLY USED IN GENERAL POWER MANAGEMENT APPLICATIONS . SEMI-CONDUCTOR MANUFACTURING INVOLVED TWO PHASES OF PRODUCTION- WAFER FABRICATION AND ASSEMBLY. THE ASSESSEE WAS PRIMARILY AN ASSEMBLER OF SEMI-CONDUCTOR DEVICES SUCH AS RECTIFIERS, DISCRETE AND MODULES WHICH WERE ESSENTIALLY LOW TECHNOLOGY ACTIVITY INVOLVING MANUAL LABOR OPERATIONS. THE SPECIALIZED NATURE OF BUSINESS ACTIVITY CARRIED OUT BY THE ASSESSEE SHALL HAVE BEA RING ON SELECTION / REJECTION OF CERTAIN COMPARABLES AS DISCUSSED BY US IN SUCCEEDING PARAGRAPHS. THE NATURE OF BUSINESS, AS PER ASSESSEE S SUBMISSIONS, WHICH IS EXTRACTED BY LD. TPO IN HIS ORDER, IS AS F OLLOWS:- SEMICONDUCTOR MANUFACTURING INVOLVES TWO PHASES OF PRODUCTION WAFER FABRICATION AND ASSEMBLY PROCESS. WAFER FABRICATIONS REQUIRES A SEQUENCE OF PROCESS STEPS THAT EXPOSE SILICON WAFERS TO CHEMICALS THAT CHANGE THEIR ELECTRICAL PROPERTIES. THE CHEMICALS ARE APPLIED IN PATTERNS THAT DEFINE CELL OR CIRCUITS WITHIN NUMEROUS INDIVIDUAL DEVICES TERMED DIE OR CHIPS ON EACH WAFER. VSIL IS ENGAGED IN THE ASSEMBLY PROCESS OF MANUFACT URING OF SEMICONDUCTOR DEVICES. THE PROCESS FOLLOWED BY VSIL IN ARRIVING A T ITS END PRODUCE (I.E. SEMICONDUCTOR DEVICES OF DIFFERENT TYPES) IS DESCRI BED AS BELOW:- VSIL PROCURES RAW MATERIAL OF DIFFERENT TYPES TO BE USED IN THE MANUFACTURING PROCESS OF SEMICONDUCTOR DEVICES. DEPENDING UPON THE NATURE OF SEMICONDUCTOR DEVICES TO BE MANUFACTURED, VARIOUS TYPES OF RAW MATERIAL PROCURED ARE MANUALLY ASSEMBLED (I.E. PROCESS OF MANUAL ASSEMBLY OR DICE PRE-SOLDIERING) THE PRE-SOLDIERING DICE UNDERGOES THROUGH A FURNACE BRAZING PROCESS. BRAZING IS A METAL JOINING PROCESS WHEREBY A FILTER METAL IS H EATED ABOVE AND DISTRIBUTED BETWEEN TWO OR MORE CLOSE FITTING PARTS BY CAPILLAR Y ACTION. FURNACE BLAZING IS A SEMI AUTOMATIC PROCESS WHEREBY THE METAL JOINING PR OCESS TAKES PLACE IN FURNACE. THE DEVICES ARE MANUALLY ASSEMBLED AND EACH MANUALL Y ASSEMBLED DEVICE UNDERGOES A FURNACE BRAZING PROCESS. DEPENDING UPON THE SEMICONDUCTOR DEVICE TO BE MANUF ACTURED INSTEAD OF THE PROCESS OF FURNACE BRAZING, THE PROCESS OF COMPRESS ION OR WIRE BONDING IS ALSO PERFORMED (COMPRESSION IS A METAL JOINING PROCESS W HEREBY METALS ARE BONDED USING HIGH PRESSURE / FORCE AND WIRE BONDING IS THE PROCESS OF MAKING INTERCONNECTIONS USING METALS LIKE ALUMINUM OR COPP ER. THE RESULTANT PRODUCT THEN UNDERGOES TESTING FOR QU ALITY PROCESSES, LABELING AND PACKING BEFORE BEING SOLD TO THE CUSTOMER. ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 5 POST PROCESSING OF RAW MATERIAL AS PER THE ABOVE PR OCESSES, A NEW AND DIFFERENT PRODUCE (IN THE FORM OF RECTIFIERS I.E. DISCRETE, M ODULES OR BRIDGES) IS OBTAINED WHICH CANNOT BE DISMANTLED OR BROUGHT BACK TO THE RAW MAT ERIAL STAGE. FURTHER THE SAME HAS A DISTINCTIVE CHARACTER AND USE. BASED ON THE ABOVE IT CAN BE NOTED THAT VSIL IS NOT ENGAGED IN THE ASSEMBLY ACTIVITY WHEREIN CERTAIN PARTS ARE BROUGHT TOGETHER AND ATTACHED TO EACH OTHER USING SCREWS, CONNECTORS ETC. VSIL IS ENGAGED IN MANUFACT URING PROCESS OF SEMICONDUCTOR DEVICES OF DIFFERENT TYPES AND IT IS THE GENERAL INDUSTRY PRACTICE TO CALL SUCH PROCESS AS ASSEMBLY PROCESS. CONSIDERING THE SAME WE SUBMIT THAT THE COMPANIES IDENTIFIED IN THE TRANSFER PRICING STUDY REPORT ARE FUNCTIONALLY COMPARABLE TO VSIL. 2.5 SO FAR AS THE COMPUTATION OF ASSESSEES PLI IS CONCERNED, THE ONLY ISSUE INVOLVED IS ADJUSTMENT OF PROVISION FOR INVENTORY OBSOLESCENCE OF RS.6.18 CRORES & LOSS ON SALE OF FIXED ASSETS FOR RS.0.39 CRORES. THESE TWO ITEMS, AS PER ASSESSEES SUBMISSIONS, WER E NOT PART OF OPERATING INCOME AND HENCE NOT REQUIRED TO BE ADJUSTED / DEDUCTED W HILE COMPUTING ASSESSEES OPERATING MARGINS WHEREAS THE LD. TPO OPINED THAT THE SAME BEING OPERATING IN NATURE, REQUIRE AD JUSTMENT WHILE COMPUTING OPERATING INCOME REFLECTED BY THE ASSESSE E. THE ADJUSTMENT OF THESE TWO ITEMS BROUGHT DOWN ASSESSEES PLI TO -1.05%, WHICH WAS ADOPTED BY LD. TPO TO COMPUTE THE IMPUGNED TRANSFER PRICING ADJUSTMENT [TP]. 2.6 THE SECOND ISSUE IS RELATED WITH SELECTION / RE JECTION OF COMPARABLES. AFTER CONSIDERING FUNCTIONAL COMPARABI LITY, THE LD. TPO, IN THE FINAL ANALYSIS HAS ADOPTED THE FIVE COMPARABLES AND REJECTED THE OTHER BY OBSERVING AS UNDER:- 6.6 THE ASSESSEES ABOVE SUBMISSIONS ARE CONSIDERED . IT IS SEEN THAT THE COMPANY K.DHANDHAPANI & CO. CANNOT BE CONSIDERED AS COMPARABLE AS IT IS INVOLVED IN MANUFACTURE OF VARIOUS ITEMS WHICH ARE NOT SEMI-CONDUCTORS. MANY OF THE OTHER COMPANIES IDENTIFIED BY THE ASSESSEE ARE INTO MANUFACTURING OR PRINTED CIRCUIT BOARD AND CAPACITORS. IT IS SEEN THAT THESE ARE FULL FLEDGED MANUFACTURING ACTIVITIES AND HENCE CANNOT BE CONSIDERED AS FUNCTI ONALLY COMPARABLE TO THE ASSESSEE. THE COMPANIES WHICH ARE INVOLVED IN PRODU CTION OF RECTIFIERS, DIODES, ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 6 THYRISTORS ARE CONSIDERED FUNCTIONALLY COMPARABLE, AS THE FUNCTIONAL ACTIVITIES ARE SAME AND PRODUCTS MANUFACTURED ARE SIMILAR. AS A RE SULT, THE FOLLOWING COMPANIES ARE CONSIDERED AS FUNCTIONALLY COMPARABLE TO THE AS SESSEE THE STAND OF LD. TPO HAS LED TO THE EXCLUSIONS OF F OLLOWING COMPARABLES AS SELECTED BY THE ASSESSEE IN ITS TRANSFER PRICING [TP] STUDY: - THE REJECTION OF ONE COMPARABLE, NAMELY SALORA INTERNATIONAL LTD. IS NOT UNDER DISPUTE BEFORE US. 2.7 FINALLY, THE DIFFERENTIAL OF MEAN PLI I.E. 17.20% AND THE ASSESSEES REVISED PLI I.E. -1.05% HAS LED TO IMPUGNED TP ADJUSTMENT OF R S.16.13 CRORES. THE SAME WAS INCORPORATED IN THE DRAFT ASSESSMENT ORDER DATED 24/12/2011 IN TERMS OF SECTION 92CA(4) WHICH WAS SU BJECTED TO ASSESSEES OBJECTIONS BEFORE LD. DRP. 3. AGGRIEVED, THE ASSESSEE RAISED OBJECTIONS AGAINS T THE SAME WITH LITTLE SUCCESS BEFORE LD. DRP VIDE DIRECTIONS U/S 1 44C(5) DATED 24/09/2012. THE SUBMISSIONS MADE BY THE ASSESSEE AG AINST THE DRAFT SR. NO. NAME OF COMPANY OP/TC 1. HBL POWER SYSTEMS 12.08 2. HIND RECTIFIERS 25.23 3. KARNATAKA HYBRID MICRO CIRCUITS LTD 22.94 4. NAINA SEMI CONDUCTORS 13.67 5. RUTTON SHAH INTL. RECTIFIERS LTD 12.07 AVERAGE 17.20 SR. NO. NAME OF COMPANY OP/TC 1. BCC FUBA LTD. 0.29 2. CIRCUITS SYSTEMS LTD. 15,73 3. FINE-LINE CIRCUITS LTD -2.54 4. INCAP LIMITED 8.96 5. K.DHANDHAPANI & CO. LTD. 3.86 6. PRECISION ELECTRONICS LTD 1.99 7. SPEL SEMICONDUCTOR LTD 20.50 8. SOLECTRON EMS LTD 6.56 9. SULAKSHANA CIRCUITS LTD 4.29 ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 7 ASSESSMENT ORDER COULD NOT FIND FAVOR BEFORE LD. DR P AND THE STAND OF LOWER AUTHORITIES ON MOST OF THE ISSUES HAS BEEN CO NFIRMED BY LD. DRP. ACCORDINGLY, INCORPORATING THE AFORESAID DIRECTIONS U/S 144C(5) OF LD. DRP, FINAL ASSESSMENT ORDER DATED 30/10/2012 HAS BE EN PASSED, WHICH HAS FURTHER BEEN CONTESTED BEFORE US BY THE ASSESSE E BY WAY OF PRESENT APPEAL. 4. THE LD. AUTHORIZED REPRESENTATIVE [AR], BY WAY O F WRITTEN SUBMISSIONS AND WITH THE HELP OF TABULAR CHART , HAS ASSAILED THE ADDITIONS MADE BY LOWER AUTHORITIES AND PLACED RELI ANCE ON SEVERAL JUDICIAL PRONOUNCEMENTS TO SUPPORT THE VARIOUS SUBM ISSIONS. THE SAME HAS BEEN CONTROVERTED BY LD. DEPARTMENTAL REPRESENT ATIVE [DR]. VEHEMENT ARGUMENTS HAVE BEEN ADDUCED BY BOTH THE RE PRESENTATIVES QUA COMPUTATION OF ASSESSEES PLI AND SELECTION / REJECTION OF COMPARABLES. 5.1 WE HAVE CAREFULLY PERUSED THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. UPON DUE CONSIDERATION , WE FIND THAT WHOLE CONTROVERSY PRIMARILY REVOLVES AROUND COMPUTATION O F ASSESSEES PLI AND SELECTION / REJECTION OF NINE COMPARABLES BESID ES SOME MINOR ISSUES. 5.2 FIRST, WE DEAL WITH COMPUTATION OF ASSESSEES PLI . SO FAR AS THE ADJUSTMENT OF LOSS ON SALE OF FIXED ASSETS IS CONCERNED, WE FIND THAT LD. DRP HAS CONCURRED WITH THE STAND OF THE ASSESSEE TH AT THE SAME DO NOT FORM PART OF OPERATING COST . AT THE SAME TIME, THE LD. AO WAS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE AND WAS FURTHER DI RECTED TO EXCLUDE THE SAID ITEM WHILE ARRIVING AT PLI OF THE COMPARABLES. HOWEVER, IN THE ABSENCE OF REQUISITE SUBMISSIONS / COMPUTATIONS MAD E BY ASSESSEE, THE ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 8 SAID ADJUSTMENT HAS NOT BEEN MADE IN THE FINAL ASSE SSMENT ORDER. THEREFORE, AT THE OUTSET, WE DIRECT LD. AO TO CARRY OUT THE SAID ADJUSTMENT IN COMPUTING THE ASSESSEES PLI AS WELL AS PLI OF THE COMPARABLES WITH A DIRECTION TO THE ASSESSEE TO PRO VIDE THE REQUISITE DETAILS IN THIS REGARD. GROUND NUMBER 7 OF THE APPE AL STAND ALLOWED FOR STATISTICAL PURPOSES. 5.3 THE SECOND ADJUSTMENT PERTAINS TO PROVISION FOR STOCK OBSOLESCENCE ADJUSTMENT WHILE COMPUTING ASSESSEES OPERATING MARGIN. THE ASSESSEE, IN ITS TP STUDY , TREATED THE PROVISION FOR INVENTORY OBSOLESCENCE OF RS.6.18 CRORES AS NON-OPERATING IN NATURE AND ACCORDINGLY COMPUTED THE ASSESSEES PLI AS 6.90%. T HE ASSESSEE SUBMITTED THAT IT HAD REVISED THE ESTIMATES FOR DET ERMINING THE PROVISION FOR INVENTORY OBSOLESCENCE IN ACCORDANCE WITH GROUP POLICY AND MANAGEMENT ESTIMATES AND ACCORDINGLY, THE SAID AMOU NT HAS BEEN CHARGED TO THE PROFIT & LOSS ACCOUNT. THE SAME BEIN G NON-RECURRING ITEM DUE TO CHANGE IN INVENTORY VALUATION POLICY, W AS NON-OPERATING IN NATURE. HOWEVER, NOT CONVINCED, LD. TPO TREATED THE SAME AS OPERATING EXPENDITURE AND REVISED ASSESSEES PLI TO -1.05% BY MAKING FOLLOWING OBSERVATIONS:- 6.4 THE ASSESSEES PLEA IS NOT ACCEPTABLE. IT WAS N OT DEMONSTRATED THAT THIS PROVISION IS INCLUDED IN THE OPERATING COST ENUMERA TED ABOVE. THERE IS NO MENTION OF THIS IN THE ANNUAL REPORT. HENCE THE OP/TC IS WO RKED OUT TO BE AS FOLLOWS:- OP. REVENUE 87,49,42,147 OP. COST 88,42,05,285 LOSS 92,63,138 OP/TC -1.05% THE LD. DRP HAS CONFIRMED THE STAND OF LD. TPO BY M AKING FOLLOWING OBSERVATIONS:- ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 9 33. WE HAVE CONSIDERED THE SUBMISSIONS OF THE ASSES SEE, THE VIEWS OF THE ASSESSING OFFICER AND THE MATERIAL ON RECORD. THIS IS AGAINST THE TPO NOT ACCEPTING THE PROVISION FOR INVENTORY ABSOLUTIONS FROM THE OP ERATING COST. THE TPO HAS MENTIONED IN THE ORDER THAT THE ASSESSEE'S CLAIM IS NOT ACCEPTABLE AS IT WAS NOT DEMONSTRATED WHETHER THIS PROVISION IS INCLUDED IN THE OPERATING COST. THE ASSESSEE HAS SUBMITTED THE COPIES OF THE DIRECTOR'S REPORT A ND NOTES TO ACCOUNT TO THE BALANCE SHEET OF THE ASSESSEE COMPANY. IT IS MENTIO NED IN THE DIRECTORS REPORT THAT DURING THE YEAR THERE WAS A REVISION IN THE ESTIMAT ES FOR DETERMINING THE PROVISION FOR OBSOLESCENCE OF INVENTORY. IT IS MENTIONED IN T HE NOTES TO ACCOUNT AT PARA 14 THAT THE PROVISION FOR INVENTORY OBSOLESCENCE HAD BEEN R EVISED DURING THE YEAR. THE TOTAL AMOUNT CHARGED TO P & L ACCOUNT FOR THE CURRENT YEA R WAS RS. 61,825/-. THE ASSESSEE HAS EXPLAINED IN THE SUBMISSION THAT THE A MOUNT IS IN THOUSANDS, WHICH MEANS THE ACTUAL AMOUNT WAS RS.6,18,25,000/-. IN TH E PROFIT AND LOSS ACCOUNT, THE OBSOLESCENCE IS NOT SEPARATELY SHOWN UNDER THE OPER ATING EXPENSES AT SCHEDULE NO.14. THE NOTE AT ITEM 14 OF THE NOTES TO ACCOUNT ALSO DOES NOT SPECIFY UNDER WHICH HEAD OF EXPENDITURE THIS AMOUNT IS DEBITED IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER IS, THEREFORE, CORRECT IN OBSERVI NG THAT THE ASSESSEE HAS NOT DEMONSTRATED THAT THE PROVISION IS INCLUDED IN THE OPERATING COST COMPUTED BY THE ASSESSEE. 34. IT IS ALSO NOT EXPLAINED WHETHER SUCH PROVISION HAS BEEN MADE FOR THE FIRST TIME AND AS AN EXTRAORDINARY MEASURE. THIS DOES NOT APPEAR TO BE SO FROM THE NOTE NO. 14 WHICH STATES THAT THE COMPANY HAS REVISED TH E ESTIMATES, IN THIS YEAR. IT APPEARS THAT IN THE INDUSTRY OBSOLESCENCE IS QUICK AND THEREFORE, PROVISIONS HAVE TO BE MADE. IF THIS IS A REGULAR FEATURE, THEN SUCH EX PENDITURE FOR PROVISION SHOULD ALSO BE DEBITED IN THE ACCOUNTS OF THE COMPARABLE COMPAN IES WHICH MANUFACTURE SIMILAR PRODUCTS. THE ASSESSEE HAS NOT PROVED THAT SUCH EXP ENDITURE IS UNIQUE TO ITS OWN CASE AND THAT SUCH PROVISION DOES NOT OCCUR IN THE COMPARABLE CASES, IN SUCH EVENT ONLY, A SUITABLE ADJUSTMENT OR EVEN EXCLUSION COULD BE NECESSARY. WITHOUT THE RELEVANT DETAILS, IT WOULD NOT BE PROPER TO EXCLUDE SUCH PROVISION FROM THE OPERATING COST, AS CLAIMED BY THE ASSESSEE. 5.4 THE LD. AR, DRAWING OUR ATTENTION TO THE FINANCIAL STATEMENTS, DIRECTORS REPORT AND OTHER DOCUMENTS PLACED IN THE PAPER-BOOK , HAS REITERATED THE CONTENTIONS. IT HAS BEEN SUBMITTED T HAT THE IMPUGNED PROVISION WAS NON-RECURRING IN NATURE AS THERE WAS CHANGE IN STOCK VALUATION POLICY DURING THE IMPUGNED AY AND THE SAM E ONE TIME EXTRA- ORDINARY EVENT AND THEREFORE THE PROVISIONS WERE NO N-OPERATING IN NATURE. PER CONTRA , LD. DR SUBMITTED THAT STOCK VALUATION WAS PART AN D PARCEL OF THE ASSESSEES OPERATIONS AND THE ASSESSE E IN SUBSEQUENT ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 10 YEARS HAS TREATED SIMILAR PROVISIONS AS OPERATING I N NATURE AND THEREFORE, THE ACTION OF LOWER AUTHORITIES WAS JUSTIFIED. 5.5 SO FAR AS THE OBSERVATIONS OF THE LOWER AUTHORI TIES ARE CONCERNED, UPON PERUSAL OF FINANCIAL STATEMENTS, WE FIND THAT AFORESAID PROVISION HAS NOT BEEN DIRECTLY DEBITED BY THE ASSESSEE IN THE PR OFIT & LOSS ACCOUNT UNDER ANY OF THE FOLLOWING HEADS:- PURCHASE OF TRADED GOODS PERSONNEL COST OPERATING & OTHER EXPENSES FINANCIAL EXPENSES DEPRECIATION THE ONLY HEAD UNDER WHICH THIS ADJUSTMENT COULD BE MADE BY THE ASSESSEE WAS MATERIAL CONSUMED , THE DETAILS OF WHICH ARE AVAILABLE AT SCHEDULE NO. 12. PRIMA FACIE, IT APPEARS THAT THE ADJUSTMENT OF THIS ITEM HAS BEEN MADE WHILE ARRIVING AT STOCK VALUATION OF RAW MATERIAL / FINISHED GOODS/WORK-IN-PROGRESS AT YEAR END. THE ITEM-WISE DETAILS OF THE SAME HAS BEEN PLACED ON PAGE NUMBERS 1025 TO 1059, THE PERUSAL OF WHICH REVEAL THAT THE ASSESSEE HAS IDENTIFIED EACH AND EV ERY ITEM OF THE STOCK AND ARRIVED AT FIGURES THEREOF AND WRITTEN OFF THE SAME WHILE VALUING THE CLOSING STOCK. AT THE SAME TIME, THE ASSESSEE, IN C OMPUTATION OF INCOME, HAS ADDED BACK THIS ITEM TREATING THE SAME AS PROVI SIONS AND CLAIMED AN AMOUNT OF RS.2.58 CRORES AGAINST THE SAME ON ACCOUN T OF STOCK ACTUALLY DESTROYED BY THE ASSESSEE OUT OF THESE ITEMS BEFORE FILING OF RETURN OF INCOME. THE PLEADINGS MADE BY THE ASSESSEE REVEAL T HAT THE DEDUCTION OF RS.2.58 CRORES HAS BEEN ALLOWED TO THE ASSESSEE IN SUBSEQUENT YEARS. THESE FACTORS, IN OUR OPINION, ARE NOT AT TANDEM WITH EACH OTHER AND REQUIRE RE-APPRECIATION. THE LOWER AUTHORITIES HAD ALSO REJECTED THE ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 11 ASSESSEES STAND PRIMARILY BY NOTICING THAT THE SAI D ITEM WAS NOT DEBITED IN THE PROFIT & LOSS ACCOUNT. THIS ISSUE REMAINS UN ADDRESSED BEFORE US ALSO AND THE FACTUAL MATRIX IS NOT CLEAR. THEREFORE , THE ISSUE IS REMITTED BACK TO THE FILE OF LD. AO / TPO FOR APPRECIATION OF THE FACTUAL MATRIX AND RE-ADJUDICATE THE SAME WITH A DIRECTION TO THE ASSE SSEE TO DEMONSTRATE / SUBSTANTIATE HIS STAND IN THIS REGARD. IN PRINCIPLE , WE ARE OF THE OPINION THAT STOCK VALUATION IS DONE IN ACCORDANCE WITH POL ICY ADOPTED BY THE MANAGEMENT IN THIS REGARD AND THE SAME CONSTITUTE P ART AND PARCEL OF ASSESSEES TRADING OPERATIONS ONLY PARTICULARLY WHE N ASSESSEE WAS TECHNOLOGY DRIVEN COMPANY AND EXPOSED TO THIS KIND OF RISK IN NORMAL COURSE OF BUSINESS. RESULTANTLY, GROUND NO. 6 STAND S ALLOWED FOR STATISTICAL PURPOSES. 6. GROUND NO. 5 IS RELATED WITH ADOPTION OF CORRECT MARGINS OF COMPARABLES ADOPTED BY LD. TPO. IN THIS REGARD, LD. AR SEEKS ENDORSEMENT OF LD. DRP DIRECTIONS ONLY. AS EVIDENT FROM THE ORDER OF LD. TPO, THE ASSESSEE VIDE ITS LETTER DATED 29/04/2011 POINTED OUT ERRORS IN MARGINS OF THE COMPARABLES ADOPTED BY THE LD. TPO W HICH WERE NOT CONSIDERED WHILE ARRIVING AT THE ADJUSTMENT. THE LD . DRP, VIDE PARA-30 DIRECTED LD. TPO TO CONSIDER THE SUBMISSIONS OF THE ASSESSEE AND MAKE NECESSARY RECTIFICATIONS. NEEDLESS TO ADD THAT ERRO RS, IF ANY, WHICH HAVE CREPT INTO WHILE COMPUTING MARGINS OF THE COMPARABL ES ARE TO BE RECTIFIED AND THEREFORE, LD. TPO IS DIRECTED TO CONSIDER THE SUBMISSIONS OF THE ASSESSEE FORTHWITH IN THIS REGARD. GROUND NO. 5 STA ND ALLOWED FOR STATISTICAL PURPOSES. 7.1 IN GROUND NO. 4, THE ASSESSEE IS AGGRIEVED BY R EJECTION OF NINE COMPARABLES SELECTED BY HIM IN HIS TP STUDY. THE PRIME ARGUMENT OF LD. ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 12 AR, IN THIS REGARD, IS THAT THESE COMPARABLES HAVE BEEN ACCEPTED BY THE REVENUE IN SUBSEQUENT YEARS AND THEREFORE, THE SAME WERE TO BE ACCEPTED IN IMPUGNED AY ALSO IN VIEW OF RULE OF CONSISTENCY . WE DO NOT AGREE WITH THE SAME SINCE THERE COULD NOT BE ANY RULE OF CONSISTENCY IN THE MATTER OF COMPARABLES SINCE TP STUDY FOR A PARTICULAR YEAR IS UNIQUE FOR EACH YEAR AND DEPEND UPON THE FUNCTIONS PERFORM ED, RISK ASSUMED AND ASSETS EMPLOYED BY THE ENTITIES AND THE SAME CO ULD NOT APPLIED BLINDLY TO ANY OTHER YEARS UNLESS IT IS DEMONSTRATE D THAT THE ENTITIES WERE EXPOSED TO SIMILAR BUSINESS ENVIRONMENT / RISK AND IN FACT, COMPARABLE IN THOSE YEARS. AT THE SAME TIME, WE FIND THAT THE MET HODOLOGY ADOPTED TO BENCHMARK THE TRANSACTIONS IS TNMM METHOD WHICH REQUIRE ONLY A BROAD FUNCTIONAL COMPARABILITY OF THE ENTITIES AND DO NOT ENVISAGE PRODUCT TO PRODUCT COMPARISON, PROVIDED THE COMPARABLES WERE O PERATING IN SIMILAR BUSINESS ENVIRONMENT AND EXPOSED TO IDENTICAL BUSIN ESS SITUATION. IN THE ABOVE BACKDROP, WE PROCEED WITH THE MATTER OF COMPA RABLES, AS URGED BEFORE US. 7.2 A PERUSAL OF ASSESSEES TP STUDY REVEAL IT WAS ENGAGED IN LABOR ASSISTED ASSEMBLY PROCESS OF SEMICONDUCTOR DEVICES OF DIFFERENT TYPES WHICH WERE MAINLY USED IN GENERAL POWER MANAGEMENT APPLICATIONS . THE VARIOUS PRODUCTS BEING MANUFACTURED BY THE ASSESSEE WERE RECTIFIERS / DIODES / BRIDGES / MODULES AND DISCRETE WHICH WERE ESSENTIALLY A LOW TECHNOLOGY ACTIVITY INVOLVING MANUAL LABOR OPERATIO NS. THESE PRODUCTS FIND USE IN VARIOUS ELECTRONIC AND INDUSTRIAL APPLI CATIONS INCLUDING MOTOR AND LIGHTING CONTROLS, WELDING EQUIPMENTS, FORKLIFT S, MACHINE TOOLS, INDUCTION HEATING, LOCOMOTIVES, MOTOR DRIVE PRODUCT ION LINES, SMELTING EQUIPMENT AND POWER SUPPLIES . IN CONTRAST TO THIS, THE NINE COMPARABLES, ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 13 AS EVIDENT FROM PAGE NUMBERS 83 TO 85 OF THE PAPER BOOK, WERE PRIMARILY ENGAGED IN FOLLOWING LINE OF BUSINESS:- THE LD. TPO HAS REJECTED THE SAME ON THE GROUND THA T THESE WERE FUNCTIONALLY DISSIMILAR. ON THE OTHER HAND, AS PER ASSESSEES SUBMISSIONS, SEMI-CONDUCTOR DEVICES, CAPACITORS AND PCBS ARE ALL ARE ALL BEING USED FOR GENERAL POWER MANAGEMENT APPLICA TIONS AND THEREFORE COMPARABLE. UPON DUE CONSIDERATION, WE FIND THAT TH E IMPORTANT FACTOR TO ADJUDGE THE COMPARABILITY IS NATURE OF MANUFACTURIN G PROCESS BEING CARRIED OUT BY THE ASSESSEE AS WELL AS THE COMPARAB LES SINCE WE HAVE ALREADY NOTED THAT TNMM METHOD REQUIRE ONLY BROAD PRODUCT COMPARABILITY AND NOT PRODUCT TO PRODUCT COMPARISON . IT IS ALSO NOTED THAT LD. TPO, IN AY 2009-10, HAS ACCEPTED FEW OF THESE C OMPARABLES, FINDING THEM FUNCTIONALLY COMPARABLE TO THE ASSESSEE. THERE FORE, THE MATTER STAND REMITTED BACK TO THE FILE OF LD. AO / TPO TO RE-APPRECIATE THE FUNCTIONAL COMPARABILITY BETWEEN ASSESSEE AND THE N INE COMPARABLES WITH A DIRECTION TO THE ASSESSEE TO DEMONSTRATE THE SAME WITH REQUISITE MATERIAL. THIS GROUND STANDS ALLOWED FOR STATISTICA L PURPOSES. 8.1 BY WAY OF GROUND NUMBER 8, THE ASSESSEE SEEKS RISK ADJUSTMENT WHILE ARRIVING AT ALP OF THE INTERNATIONAL TRANSACTIONS. THE ASSESSEE, SR. NO. NAME OF COMPANY PRODUCT 1. BCC FUBA LTD. PRINTED CIRCUIT BOARDS 2. CIRCUITS SYSTEMS LTD. PRINTED CIRCUIT BOARDS 3. FINE-LINE CIRCUITS LTD PRINTED CIRCUIT BOARDS 4. INCAP LIMITED CAPACITORS 5. K.DHANDHAPANI & CO. LTD. CAPACITORS 6. PRECISION ELECTRONICS LTD PRINTED CIRCUIT BOARDS 7. SPEL SEMICONDUCTOR LTD INTEGRATED CIRCUITS 8. SOLECTRON EMS LTD PRINTED CIRCUIT BOARDS 9. SULAKSHANA CIRCUITS LTD PRINTED CIRCUIT BOARDS ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 14 BEFORE LOWER AUTHORITIES, HAD CONTENDED THAT IT WAS NOT INTO SIGNIFICANT RESEARCH & DEVELOPMENT AND THEREFORE, NOT EXPOSED TO ASSOCIATED RISKS AND ENTIRE PRODUCTION WAS SOLD TO ITS AE . THEREFORE, IT WAS TO BEAR LIMITED BUSINESS RISK, MARKET RISK, PRODUCT LIABILITY RISK, CREDIT & COLLECTION RISK ETC. AS AGAINST COMPARABLE COMPANIES WHICH WERE FUL L RISK BEARING INDEPENDENT ENTRIES. HENCE, IT WAS ENTITLED FOR RIS K ADJUSTMENT IN TERMS OF VARIOUS JUDICIAL PRONOUNCEMENTS. THE LD. DR HAS ASS AILED THE SAME ON THE GROUND THAT THERE WAS NOTHING ON RECORD TO SUGG EST THAT THE COMPARABLES WERE FULL RISK BEARING ENTITIES AND FUR THER, THE ASSESSEE WAS COMPLETELY DEPENDENT ON ITS AE TO ACHIEVE THE TURNO VER AND HENCE, EXPOSED TO MORE RISK IN THE SENSE THAT ANY ADVERSE IMPACT ON AE SHALL HAVE DIRECT AND CORRESPONDING ADVERSE IMPACT ON THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE WAS EXPOSED TO SEVERAL OTHER RISKS VIZ. TECHNOLOGY RISK AND FOREIGN EXCHANGE RISK ETC. 8.2 UPON DUE CONSIDERATION, WE STRENGTH IN THE ARGU MENTS ADVANCED BY REVENUE THAT KEEPING IN VIEW THE NATURE OF ASSES SEES BUSINESS, IT WAS EXPOSED TO VARIED RISKS VIZ. TECHNOLOGY RISK & FOREIGN EXCHANGE RISK ETC. AND FURTHER, THERE IS NOTHING ON RECORD TO SUGGEST THAT ALL THE COMPARABLES WERE FULL RISK BEARING ENTITIES. THIS I S EVIDENT AND FULLY SUPPORTED BY OUR OBSERVATION AT PARA-5.5 WHERE IT IS NOTED THAT THE ASSESSEE HAS WRITTEN-OFF AN AMOUNT OF RS.6.18 CRORE S FOR STOCK OBSOLESCENCE WHICH HAS ACTUALLY BEEN DESTROYED OVER A PERIOD OF TIME AND DEDUCTION THEREOF HAS BEEN CLAIMED BY THE ASSES SEE. THEREFORE, WE HAVE NO HESITATION IN CONCLUDING THAT THE ASSESSEE WAS CERTAINLY EXPOSED TO TECHNOLOGY RISK. SECONDLY, IT IS NOTED THAT LD. DRP HAS REJECTED THE GROUND OF THE ASSESSEE BY MAKING FOLLO WING OBSERVATIONS:- ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 15 42. WE HAVE CONSIDERED THE SUBMISSIONS OF THE ASSES SEE, THE VIEWS OF THE ASSESSING OFFICER AND THE MATERIAL ON RECORD. A NEC ESSARY CONDITION BEFORE SUCH ADJUSTMENT IS MADE IS THERE SHOULD BE COMPLETE FINA NCIAL DETAILS WITH REGARD TO THE COMPARABLE COMPANIES, THE PROCESS EMPLOYED IN THE B USINESS, THE TURNOVER RATE ETC. WITHOUT A FULL KNOWLEDGE OF THE COMPARABLE COM PANIES, SUCH ADJUSTMENT CANNOT BE MADE. A CALCULATION BASED ON A MATHEMATICAL MODE L DOES NOT NECESSARILY GIVE A PROPER RESULT. THIS GROUND IS REJECTED. WE CONCUR WITH THE STAND OF LD. DRP ALSO IN THIS RE GARD SINCE THE ADJUSTMENT COULD NOT BE PROVIDED TO THE ASSESSEE ON MERE ASSUMPTIONS WITHOUT THERE BEING ANY COGENT MATERIAL ON RECORD T O SUBSTANTIATE THOSE ASSUMPTIONS / CONTENTIONS. RESULTANTLY, THIS GROUND STAND DISMISSED. 9. GROUND NUMBER 9 IS RELATED WITH BENEFIT OF +/-5% IN TERMS OF ERSTWHILE PROVISO TO SECTION 92C(2) WHICH HAS BEEN REJECTED BY LD. DRP IN TERMS OF BOARDS CIRCULAR NO. 142/13/2010-SO (TPL) DATED 30/09/2010 . PRIMA FACIE, THE SAID CIRCULAR APPLIES TO PENDING PROCEEDINGS AS ON 01/10/2009. THEREFORE, SINCE THE MATTER OF CO MPARABLE HAS ALREADY BEEN REMITTED BACK TO THE FILE OF LD. AO / TPO, AT THE MOMENT, WE CAN ONLY DIRECT THE LOWER AUTHORITIES TO GRANT A DJUSTMENTS / CONCESSIONS, WHICH ARE AVAILABLE TO THE ASSESSEE WI THIN THE FRAMEWORK OF LAW WHILE DETERMINING ALP OF THE TRANSACTIONS AS AFORESAID. THIS GROUND STAND ALLOWED FOR STATISTICAL PURPOSES. 10. BY WAY OF GROUND NO. 11, THE ASSESSEE IS SEEKIN G ENDORSEMENT OF LD. DRPS DIRECTIONS WHICH ARE RELATED WITH DEPRECIATION ON PROJECTORS AND ALLOWANCE OF PROVISIONS DISALLOWED IN EARLIER YEARS. WE FIND THAT DIRECTIONS TO VERIFY THE SAME HAS ALREADY BEEN PROV IDED BY LD. DRP VIDE PARA NO. 54 OF ITS DIRECTIONS. BY ENDORSING THE SAME, WE DIREC T THE LD. AO TO VERIFY THE CLAIM OF THE ASSESSEE IN THE LIGHT OF SUBMISSIONS MADE BEFORE LD. DRP. THIS GROUND STANDS ALLOWED FOR STAT ISTICAL PURPOSES. ITA NO.7503/MUM/2012 VISHAY SEMICONDUCTOR INDIA PRIVATE LIMITED ASSESSMENT YEAR 2008-09 16 11. ALL THE GROUNDS STAND DISPOSED-OFF IN THE FOLLO WING MANNER:- 12. THE APPEAL STANDS PARTLY ALLOWED FOR STATISTICA L PURPOSES IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH MAY, 2018. SD/- SD/- (MAHAVIR SINGH) (MANOJ K UMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 04.05.2018 SR.PS:-THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. +, !$- , - , / DR, ITAT, MUMBAI 6. ,./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI GROUND NO. PARTICULARS RESULT 1. ADJUSTMENT TO INTERNATIONAL TXNS. GENERAL IN NAT URE 2. & 3. CONTEMPORANEOUS & SINGLE YEAR DATA NOT PRES SED 4. REJECTION OF ASSESSEES COMPARABLES ALLOWED FOR STATISTICAL PURPOSES 5. NON CONSIDERATION OF CORRECT MARGINS ALLOWED FOR STATISTICAL PURPOSES 6. INVENTORY OBSOLESCENCE ALLOWED FOR STATISTICAL P URPOSES 7. NATURE OF LOSS ON FIXED ASSETS ALLOWED FOR STATI STICAL PURPOSES 8. NON CONSIDERATION OF RISK ADJUSTMENT DISMISSED 9. BENEFIT OF +/-5% ALLOWED FOR STATISTICAL PURPOSE S 10. DESTRUCTION OF STOCK NOT PRESSED 11. DEPRECIATION ON PROJECTOR & DEDUCTION OF PROVISIONS DISALLOWED IN EARLIER YEARS ALLOWED FOR STATISTICAL PURPOSES