Infac India Pvt Limited, Kancheepuram V. DCIT Corporate Circle 2(2), CHENNAI

ITTPA 27/CHNY/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3970 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 03-07-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR M SRINIVASA RAO
• Assessee Lawyers: S RAGHUNATHAN
• Keywords: Transfer pricing; International transaction
• Section: 234B; 133(6); 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ IT(TP)A NO.27/CHNY/2018 ( )( / ASSESSMENT YEAR : 2014-15 M/S INFAC INDIA PRIVATE LIMITED, NO.113, ELLAIAMMAN KOIL STREET, PADAPPAI, KANCHIPURAM 601 301. PAN : AADCS 4890 C V. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(2), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI S. RAGHUNATHAN, ADVOCATE -.+, / 0 / RESPONDENT BY : DR. M. SRINIVASA RAO, CIT 1 / 2% / DATE OF HEARING : 26.09.2018 3') / 2% / DATE OF PRONOUNCEMENT : 05.10.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ASSESSMENT ORDER DATED 28.06.2018, PASSED CONSEQUEN T TO THE DIRECTION OF THE DISPUTE RESOLUTION PANEL DATED 09. 05.2015, FOR THE ASSESSMENT YEAR 2014-15. 2 IT(TP)A NO.27/CHNY/18 2. SHRI S. RAGHUNATHAN, THE LD.COUNSEL FOR THE ASSE SSEE, SUBMITTED THAT THE FIRST ISSUE ARISES FOR CONSIDERA TION IS INCLUSION OF M/S SUPRAJIT ENGINEERING LTD. AS COMPARABLE COMPANY BY THE TRANSFER PRICING OFFICER . ACCORDING TO THE LD. CO UNSEL, M/S SUPRAJIT ENGINEERING LTD. IS NOT A COMPARABLE COMPANY WITH T HAT OF THE ASSESSEE. THE LD.COUNSEL FURTHER SUBMITTED THAT TH E ASSESSEE- COMPANY ENGAGED ITSELF IN THE BUSINESS OF MANUFACTU RING AND SUPPLY OF CONTROL CABLE AND CATERING ONLY TO 4-WHEE LER AUTOMOBILES, ESPECIALLY CAR INDUSTRY HYUNDAI MOTORS INDIA. HOWE VER, M/S SUPRAJIT ENGINEERING LTD. ENGAGED ITSELF IN A DIVERSIFIED BU SINESS AND CATERING TO THE NEEDS OF NOT ONLY TO 4-WHEELER INDU STRY BUT ALSO 2- WHEELER AUTOMOBILE INDUSTRIES. UNLIKE THE ASSESSEE -COMPANY, ACCORDING TO THE LD. COUNSEL, IT IS NOT DOING SALES TO HYUNDAI MOTORS INDIA. M/S SUPRAJIT ENGINEERING LTD. CATERS TO THE NEEDS OF ALMOST ALL THE AUTOMOBILE MANUFACTURERS, INCLUDING TATA MO TORS, BMW, GENERAL MOTORS (INDIA), VOLKSWAGEN, FORD INDIA LTD. , ETC. ACCORDING TO THE LD. COUNSEL, M/S SUPRAJIT ENGINEERING LTD. A LSO SUPPLIES PRODUCTS TO GLOBAL AND DOMESTIC 2-WHEELER CUSTOMERS INCLUDING TVS MOTORS, HERO MOTORCYCLE & SCOOTER INDIA, ETC. ACCO RDING TO THE LD. COUNSEL, SINCE THE ASSESSEE-COMPANY SUPPLIES ONLY T O HYUNDAI MOTORS INDIA, THE PROFIT MARGIN IS VERY LOW, WHEREA S, M/S SUPRAJIT 3 IT(TP)A NO.27/CHNY/18 ENGINEERING LTD. SUPPLIES TO VARIETY OF AUTOMOBILE MANUFACTURERS, INCLUDING 2-WHEELER, THE PROFIT MARGIN WAS MORE. M /S SUPRAJIT ENGINEERING LTD. EARNS MORE PROFIT IN RESPECT OF TH E PRODUCTS SUPPLIED TO 2-WHEELER INDUSTRIES. ACCORDING TO THE LD. COUNSEL, IN RESPECT OF 2-WHEELER INDUSTRY M/S SUPRAJIT ENGINEER ING LTD. COMMANDS 18% OPERATING MARGIN. HOWEVER, IT HAS ONL Y 5% MARGIN IN 4-WHEELER INDUSTRY. MOREOVER, ACCORDING TO THE LD. COUNSEL, THE SEGMENTAL DETAILS WERE NOT AVAILABLE IN RESPECT OF SUPRAJIT ENGINEERING LTD., THEREFORE, IT IS NOT A COMPARABLE COMPANY. 3. ON THE CONTRARY, DR. M. SRINIVASA RAO, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT M/S SUPRAJIT ENGINEE RING LTD. IS AN AUTOMOBILE ENGINEERING COMPANY. THEY ARE EARNING M ORE PROFIT THAN THE ASSESSEE. ACCORDING TO THE LD. D.R., THE ASSESSEE- COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURE A ND SALE OF BRAKE LINING TO AUTOMOBILE INDUSTRY. M/S SUPRAJIT ENGINEERING LTD. IS ALSO ENGAGED IN THE SAME BUSINESS. THE ANNUAL REPO RT OF M/S SUPRAJIT ENGINEERING LTD. PRODUCED BY THE ASSESSEE BEFORE THE TPO AND DRP IS NOT REFLECTING THE CORRECT STATUS OF THE PROFIT. ACCORDING TO THE LD. D.R., THESE ARE ALL PREPARED FOR THE PUR POSE OF MARKET, THEREFORE, THE SAME CANNOT BE PLACED MUCH RELIANCE. HENCE, 4 IT(TP)A NO.27/CHNY/18 ACCORDING TO THE LD. D.R., M/S SUPRAJIT ENGINEERING LTD. IS ALSO ONE OF THE COMPARABLE WHICH WAS RIGHTLY TAKEN AS COMPAR ABLE BY THE TPO AND DRP. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G BRAKE LINING TO AUTOMOBILE INDUSTRY, MORE PARTICULARLY, 4-WHEELE R. THE ASSESSEE CLAIMS THAT THE BRAKE LINING MANUFACTURED BY THE AS SESSEE WAS SUPPLIED TO HYUNDAI MOTOR INDIA LTD. SIMILARLY, M/ S SUPRAJIT ENGINEERING LTD. IS ALSO MANUFACTURING BRAKE LINING FOR 4-WHEELER AUTOMOBILE MANUFACTURED BY VARIOUS AUTOMOBILE INDUS TRIES. IN ADDITION TO THAT, M/S SUPRAJIT ENGINEERING LTD. ALS O MANUFACTURES BRAKE LINING FOR 2-WHEELER. THE ASSESSEE CLAIMS TH AT SINCE M/S SUPRAJIT ENGINEERING LTD. IS MANUFACTURING PRODUCTS NOT ONLY FOR 4- WHEELER BUT ALSO FOR 2-WHEELER AND SEGMENTAL DETAIL S ARE NOT AVAILABLE, HENCE IT CANNOT BE TAKEN AS COMPARABLE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN M/S SUPRAJIT EN GINEERING LTD. MANUFACTURES BRAKE LINING FOR 4-WHEELER AND FOR 2-W HEELER AUTOMOBILE INDUSTRIES, SEGMENTAL DETAILS MIGHT BE A VAILABLE WITH M/S SUPRAJIT ENGINEERING LTD. PRESUMABLY, IT MAY NOT B E AVAILABLE IN THE 5 IT(TP)A NO.27/CHNY/18 PUBLIC DOMAIN SO THAT THE ASSESSEE COULD NOT ACCESS IT. HOWEVER, THE REVENUE CAN OBTAIN VERY WELL THE SEGMENTAL DETA ILS AFTER ISSUING NECESSARY NOTICE UNDER SECTION 133(6) OF THE INCOME -TAX ACT, 1961 (IN SHORT 'THE ACT') TO M/S SUPRAJIT ENGINEERING LT D. THEREFORE, THE MATTER NEEDS TO BE RE-EXAMINED BY THE AUTHORITIES B ELOW. ACCORDINGLY, THE ORDERS OF THE AUTHORITIES BELOW AR E SET ASIDE AND THE ISSUE WITH REGARD TO COMPARISON OF M/S SUPRAJIT ENGINEERING LTD. AS ONE OF THE COMPARABLE IS REMITTED BACK TO THE FI LE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE- EXAMINE THE ISSUE AFRESH AND REFER THE MATTER TO THE TPO FOR RE CONSIDERATION. THE TPO SHALL COLLECT THE DETAILS FROM M/S SUPRAJIT ENGINEERING LTD. BY ISSUING NOTICE UNDER SECTION 133(6) OF THE ACT A ND FIND WHETHER THE SEGMENTAL DETAILS ARE AVAILABLE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. IT IS NEEDLESS TO P OINT OUT THAT THE DETAILS AND INFORMATION COLLECTED BY THE TPO IN EXE RCISE OF HIS POWER CONFERRED UNDER SECTION 133(6) OF THE ACT SHA LL ALSO BE FURNISHED TO THE ASSESSEE BEFORE PLACING ANY RELIAN CE ON THE DECISION MAKING PROCESS. THEREAFTER THE ASSESSING OFFICER / ASSESSEE SHALL FOLLOW THE PROCEDURE AS LAID DOWN IN SECTION 144C OF THE ACT. 6 IT(TP)A NO.27/CHNY/18 5. THE NEXT ISSUE ARISES FOR CONSIDERATION IS LOSS ON FOREIGN EXCHANGE FLUCTUATION. 6. SHRI S. RAGHUNATHAN, THE LD.COUNSEL FOR THE ASSE SSEE, SUBMITTED THAT THE AUTHORITIES BELOW OUGHT TO HAVE REMOVED THE LOSS ON FOREIGN EXCHANGE FLUCTUATION FROM THE OPERATING EXPENDITURE. ACCORDING TO THE LD. COUNSEL, LOSS ON FOREIGN EXCHA NGE FLUCTUATION AROSE DUE TO REINSTATEMENT OF FOREIGN CURRENCY AS P ER THE ACCOUNTING STANDARD. REFERRING TO COPY OF THE ORDE R OF THIS TRIBUNAL IN I.T.A. NO.1037/MDS/2014 DATED 22.02.2017 IN DCIT V. HANIL TUBE INDIA PVT. LTD., A COPY OF WHICH IS AVAILABLE AT PA GE 141 OF THE PAPER-BOOK, THE LD.COUNSEL SUBMITTED THAT WHILE COM PUTING PROFIT LEVEL INDICATOR, OPERATING INCOME FOR THE PURPOSE O F PLI, BOTH FOREIGN EXCHANGE LOSS OR GAIN SHALL BE EXCLUDED FRO M THE OPERATING INCOME. 7. ON THE CONTRARY, DR. M. SRINIVASA RAO, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE FOREIGN EXCHANGE LOSS OR GAIN ARISING DUE TO REVENUE RECEIPTS SHALL FORM PART OF OPERATING INCOME. THE REINSTATEMENT OF ACCOUNTS WAS MADE ONLY FOR THE PURPOSE OF ACCOUNTING STANDARD, THEREFORE, LOSS OR GAIN ON ACC OUNT OF FOREIGN 7 IT(TP)A NO.27/CHNY/18 EXCHANGE FLUCTUATION DUE TO REINSTATEMENT OF ACCOUN T IS ONLY A NOTIONAL, THEREFORE, IT CANNOT BE EXCLUDED FROM OPE RATING INCOME. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AN IDENTICAL ISSUE WAS CONSIDERED BY THE CO-ORDINATE BENCH OF TH IS TRIBUNAL IN HANIL TUBE INDIA PVT. LTD. (SUPRA). THIS TRIBUNAL A FTER REFERRING TO SAFE HARBOUR RULES, FOUND THAT THE LOSS INCURRED BY THE ASSESSEE IN FOREIGN EXCHANGE FLUCTUATION DUE TO INTERNATIONAL T RANSACTION DOES NOT GIVE ANY EXTRA BENEFIT TO THE ASSOCIATED ENTERP RISE WHO SUPPLIES THE MATERIAL. THE LOSS AROSE DUE TO EXCHANGE DIFFE RENCE BETWEEN THE FOREIGN CURRENCY AND INDIAN CURRENCY. THEREFOR E, THE CO- ORDINATE BENCH OF THIS TRIBUNAL FOUND THAT THE FORE IGN EXCHANGE LOSS OR GAIN HAS TO BE EXCLUDED FROM OPERATING INCOME. IN VIEW OF THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN H ANIL TUBE INDIA PVT. LTD. (SUPRA), THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT THE PROFIT OR LOSS DUE TO FOREIGN EXCHANGE FLUCTUATION HAS TO BE EXCLUDED FROM THE OPERATING INCOME FOR THE PURPOSE OF PLI. ACCORDINGLY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND T HE ASSESSING OFFICER IS DIRECTED TO EXCLUDE THE LOSS OR GAIN IN FOREIGN EXCHANGE FLUCTUATION FROM THE OPERATING INCOME FOR COMPUTING PLI. 8 IT(TP)A NO.27/CHNY/18 9. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WORKI NG CAPITAL ADJUSTMENT FOR DETERMINATION OF ARM'S LENGTH PRICE. 10. SHRI S. RAGHUNATHAN, THE LD.COUNSEL FOR THE ASS ESSEE, SUBMITTED THAT WORKING CAPITAL ADJUSTMENT NEEDS TO BE MADE FOR THE PURPOSE OF DETERMINATION OF ARM'S LENGTH PRICE. AC CORDING TO THE LD. COUNSEL, THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DOOSAN POWER SYSTEMS INDIA PVT. LTD. V. DCIT IN I.T .A. NO.581/MDS/2016 DATED 14.12.2016, FOUND THAT SUCH A DJUSTMENT IS A NECESSARY ONE WHILE COMPUTING PROFIT LEVEL INDICA TOR. REFERRING TO INTEREST, THE LD.COUNSEL SUBMITTED THAT THIS ISS UE WAS ALSO CONSIDERED BY THE CO-ORDINATE BENCH OF THIS TRIBUNA L IN THE ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2013-14 IN I.T.A. NO.3195/CHNY/2017 DATED 03.05.2018. THIS TRIBUNAL FOUND THAT THE BASIS FOR CALCULATION OF NUMBER OF DAYS OF HOLDING OF INVENTORY, RECEIVABLES AND CREDITORS OF THE COMPARABLES VIZ-A- VIZ THE ASSESSEE. FOR WORKING OUT THE RATE OF INTEREST AND CALCULATING THE CAPITAL ADJUSTMENT, THIS TRIBUNAL TOOK 18.5% AS PLR I OF HDFC. THIS TRIBUNAL FOUND THAT ACTUAL INTEREST PAID WAS NEVER CONSIDERED BY THE ASSESSEE, THEREFORE, THE ORDERS OF THE AUTHORITIES BELOW ARE CONFIRMED. THE LD.COUNSEL FURTHER SUBMITTED THAT SINCE THE 9 IT(TP)A NO.27/CHNY/18 ASSESSEE TOOK HDFC PLRI AT 18.5%, THIS TRIBUNAL CON FIRMED THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE MAY NOT HAVE ANY OBJECTION FOR TAKING STATE BANK OF INDIA PLRI FOR T HE PURPOSE OF COMPUTING THE INTEREST RATE. 11. ON THE CONTRARY, DR. M. SRINIVASA RAO, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT AS IN THE CASE OF TH E ASSESSEE FOR ASSESSMENT YEAR 2013-14, THE ACTUAL INTEREST PAID W AS NEVER CONSIDERED BY THE ASSESSEE. THE ASSESSEE ESTIMATED THE PROFIT ON THE BASIS OF PLRI OF BANK. ACCORDING TO THE LD. D. R., WHAT IS TO BE CONSIDERED IS THE ACTUAL INTEREST PAID BY THE ASSES SEE. SINCE THE ACTUAL INTEREST PAID BY THE ASSESSEE WAS NOT CONSID ERED, THE ORDERS OF AUTHORITIES BELOW ARE TO BE CONFIRMED. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS FAR AS WORKING CAPITAL ADJUSTMENT WAS CONCERNED, THIS TRIBUNAL IN THE CASE OF DOOSAN POWER SYSTEMS INDIA PVT. LTD. (SUPRA) FOUND THAT WORKING CAPITAL ADJUSTMENT HAS TO BE MADE WHILE COMPUTING P LI. IN VIEW OF THIS DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL , THE WORKING CAPITAL ADJUSTMENT HAS TO BE MADE. HOWEVER, THE AS SESSING OFFICER SHALL FIND OUT THE WORKING CAPITAL OF THE COMPARABL E COMPANIES AND 10 IT(TP)A NO.27/CHNY/18 THAT OF THE ASSESSEE BY ISSUING NOTICE UNDER SECTIO N 133(6) OF THE ACT IF NECESSARY, AND THEREAFTER SHALL MAKE NECESSA RY ADJUSTMENT WHILE COMPUTING PLI. 13. NOW COMING TO PAYMENT OF INTEREST ON DELAYED RE CEIVABLES, AS FOUND IN THE ORDER OF THIS TRIBUNAL IN THE ASSES SEE'S OWN CASE FOR ASSESSMENT YEAR 2013-14, ACTUAL INTEREST PAID WAS N EVER CONSIDERED BY THE ASSESSEE, THEREFORE, THIS TRIBUNA L DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AU THORITIES AND ACCORDINGLY THE SAME ARE CONFIRMED. 14. THE NEXT ISSUE ARISES FOR CONSIDERATION IS COMP UTING THE OPM OF THE COMPARABLE COMPANIES BY THE ASSESSING OF FICER WHILE GIVING EFFECT TO THE ORDER OF THE DRP. 15. SHRI S. RAGHUNATHAN, THE LD.COUNSEL FOR THE ASS ESSEE, SUBMITTED THAT THE ASSESSEE FILED A MISCELLANEOUS P ETITION UNDER SECTION 144 OF THE ACT BEFORE THE ASSESSING OFFICER AND THE SAME IS PENDING, THEREFORE, THE MATTER MAY BE REMITTED BACK TO THE ASSESSING OFFICER SO THAT THE ASSESSING OFFICER CAN PASS THE ORDER. 16. WE HEARD DR. M. SRINIVASA RAO, THE LD. DEPARTME NTAL REPRESENTATIVE ALSO. IT IS NOT IN DISPUTE THAT AN APPLICATION FILED BY 11 IT(TP)A NO.27/CHNY/18 THE ASSESSEE UNDER SECTION 144 OF THE ACT IN RESPEC T OF COMPUTING THE OPM WHILE GIVING EFFECT TO THE ORDER OF THE DRP , IS PENDING BEFORE THE ASSESSING OFFICER. IN VIEW OF THE ABOVE , THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE MATTER IS R EMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFIC ER SHALL RE- EXAMINE THE ISSUE AFRESH IN THE LIGHT OF THE MATERI AL AVAILABLE ON RECORD AND THEREAFTER DECIDE THE SAME AFRESH IN ACC ORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE A SSESSEE. 17. THE NEXT ISSUE ARISES FOR CONSIDERATION IS DOWN WARD ADJUSTMENT ON THE ENTIRE TRANSACTIONS OF THE ASSESS EE INSTEAD OF THE TRANSACTION OF ASSOCIATED ENTERPRISE ALONE. 18. SHRI S. RAGHUNATHAN, THE LD.COUNSEL FOR THE ASS ESSEE, SUBMITTED THAT WHILE CONSIDERING INTERNATIONAL TRAN SACTION AND DETERMINATION OF ARM'S LENGTH PRICE, THE ASSESSING OFFICER OR THE TPO SHALL CONSIDER ONLY THE TRANSACTION OF THE ASSE SSEE WITH ASSOCIATED ENTERPRISE OUTSIDE THE COUNTRY. IN THIS CASE, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER HAS TAKEN ENTIRE TRANSACTIONS. PLACING RELIANCE ON THE ORDER OF THI S TRIBUNAL IN YONGSAN AUTOMOTIVE INDIA PVT. LTD. V. ACIT IN I.T.A . NO.357/MDS/2017 DATED 16.11.2017, A COPY OF WHICH I S AVAILABLE AT 12 IT(TP)A NO.27/CHNY/18 PAGE 147 OF THE PAPER-BOOK, THE LD.COUNSEL SUBMITTE D THAT THE CO- ORDINATE BENCH OF THIS TRIBUNAL FOUND THAT UNDER TH E SCHEME OF THE INCOME-TAX ACT, THE TRANSFER PRICING ADJUSTMENT HAS TO BE MADE ONLY IN RESPECT OF THE TRANSACTION OF THE ASSESSEE, BEIN G A TESTED PARTY, WITH ASSOCIATED ENTERPRISE OUTSIDE THE COUNTRY AFTE R COMPARING THE TRANSACTION MADE BY SIMILARLY PLACED COMPANY IN UNC ONTROLLED TRANSACTION WITH NON-ASSOCIATED ENTERPRISE. THEREF ORE, ACCORDING TO THE LD. COUNSEL, THE TPO AND DRP ARE NOT JUSTIFIED IN TAKING ENTIRE TRANSACTIONS OF THE ASSESSEE INSTEAD OF CONFINING T HEMSELVES TO THE INTERNATIONAL TRANSACTION OF THE ASSESSEE WITH THE ASSOCIATED ENTERPRISE. 19. ON THE CONTRARY, DR. M. SRINIVASA RAO, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THIS TRIBUNAL IN THE CASE OF CATERPILLAR INDIA PVT. LTD. V. ACIT IN I.T.A. NOS.2 04 & 365/MDS.2012 DATED 05.04.2017 FOUND THAT THE ENTIRE TRANSACTIONS SHALL BE TAKEN INTO ACCOUNT. SUBSEQUENTLY, BY FOLLOWING THE JUDGM ENT OF BOMBAY HIGH COURT IN CIT V ALSTOM PROJECTS INDIA LIMITED ( 394 ITR 141) THIS TRIBUNAL FOUND THAT ONLY THE TRANSACTION OF THE ASS ESSEE WITH ASSOCIATED ENTERPRISE SHALL BE TAKEN INTO CONSIDERA TION. THE REVENUE HAS FILED APPEAL BEFORE THE APEX COURT AND THE SLP IS 13 IT(TP)A NO.27/CHNY/18 PENDING AGAINST THE JUDGMENT OF BOMBAY HIGH COURT. THEREFORE, ACCORDING TO THE LD. D.R., TO KEEP THE MATTER ALIVE , THE TPO AND DRP HAVE REJECTED THE CLAIM OF THE ASSESSEE. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE INCOME-TAX ACT, BEING A SPECIAL ENACTMENT, THE JUDGMENT OF BOM BAY HIGH COURT ON THE SUBJECT, AS ON TODAY, RULES THE FIELD. THER EFORE, THE CO- ORDINATE BENCH OF THIS TRIBUNAL, AFTER FOLLOWING TH E JUDGMENT OF BOMBAY HIGH COURT IN YONGSAN AUTOMOTIVE INDIA PVT. LTD. (SUPRA), FOUND THAT THE TRANSACTION OF THE ASSESSEE BEING A TESTED PARTY WITH ASSOCIATED ENTERPRISE OUTSIDE THE COUNTRY ALONE HAS TO BE TAKEN INTO CONSIDERATION. NOW THE REVENUE CLAIMS THAT AN APPE AL IS PENDING BEFORE THE APEX COURT IN THE CASE OF ALSTOM PROJECT S INDIA LIMITED. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT A M ERE PENDING OF APPEAL BEFORE THE APEX COURT CANNOT A GROUND TO TAK E A DIFFERENT VIEW. ACCORDINGLY, THE ORDERS OF ALL THE AUTHORITI ES BELOW ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO CONS IDER THE TRANSACTION OF THE ASSESSEE WITH ASSOCIATED ENTERPR ISE OUTSIDE THE COUNTRY ONLY AND COMPARE THE SAME WITH THE TRANSACT ION MADE BY THE SIMILARLY PLACED COMPANY IN UNCONTROLLED TRANSA CTION WITH NON- 14 IT(TP)A NO.27/CHNY/18 ASSOCIATED ENTERPRISE. THEREFORE, FOR RECONSIDERAT ION, THE MATTER IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL CONSIDER THE ISSUE AFRESH AS INDICATE D ABOVE. 21. THE NEXT ISSUE ARISES FOR CONSIDERATION IS COMP UTATION OF INTEREST UNDER SECTION 234A AND 234B OF THE ACT. 22. AFTER HEARING SHRI S. RAGHUNATHAN, THE LD.COUNS EL FOR THE ASSESSEE AND DR. M. SRINIVASA RAO, THE LD. DEPARTME NTAL REPRESENTATIVE, THIS TRIBUNAL FINDS THAT THE INTERE ST IS CONSEQUENTIAL AND MANDATORY. THEREFORE, WHILE GIVING EFFECT TO T HE ORDER OF THIS TRIBUNAL, THE ASSESSING OFFICER SHALL RECOMPUTE THE INTEREST. 23. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 5 TH OCTOBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 5 TH OCTOBER, 2018. 15 IT(TP)A NO.27/CHNY/18 KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. ITO (OSD), DRP-2, BENGALURU 4. PRINCIPAL CIT-2, CHENNAI 5. CIT(TP), CHENNAI 6. 79 -2 /DR 7. ( : /GF.