UIL ELECTRONICS INDIA PRIVATE LIMITED,GAUTAM BUDH NAGAR V. ACIT, DCIT, NFAC, DRP, CIVIC CENTER, NEW DELHI

ITA 3712/DEL/2024

AI Insights

The case involves UIL Electronics India Private Limited, a company engaged in manufacturing mobile accessories and exporting exclusively to its Associated Enterprises (AEs). The TPO made an upward adjustment of Rs. 8,46,27,297 to the assessee's transfer pricing, which was contested. The primary issues in the appeal were the non-selection of comparables with R&D expenses equivalent to 2% of net sales and the non-provision of working capital adjustments. The Tribunal found that the lower authorities had not adequately addressed these issues and thus remitted the matter back to the TPO for a detailed re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713137 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2020-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.K. JADHAV
• Assessee Lawyers: RAJESH DUA
• Keywords: Business income; Transfer pricing; International transaction

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’: NEW DELHI BEFORE SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.3712/Del/2024 (ASSESSMENT YEAR 2020-21) UIL Electronics India Private Limited, Plot No.114-116, 123-126B, Ecotech-1 Extension, Greater Noida- 201308. Uttar Pradesh PAN-AAACO0160A Vs. ACIT, DCIT, NFAC, DRP, Civic Centre, New Delhi. (Appellant) (Respondent) Assessee by Shri Rajesh Dua, CA Department by Shri S. K. Jadhav, CIT-DR Date of Hearing 24/07/2025 Date of Pronouncement 30/07/2025 O R D E R PER PRAKASH CHAND YADAV, JM: The present appeal of the assessee is arising out from the order of Ld. Assessing Officer dated 19th July, 2024 and relates to Asst. Year 2020-21. 2. Brief facts of the case as coming out from the orders of authorities below are that the assessee is a company and engaged in the manufacturing of mobile accessories. The assessee is exporting the manufacturing products to its Associated Enterprises (AE) only. The assessee is 100% captive unit, which means the assessee does not have any transactions with non-associated enterprises for the year under consideration. The assessee has entered into international transaction with AEs; accordingly, a reference was made to the TPO, who after analyzing the TP study report of the assessee made an upward adjustment Rs. 8,46,27,297/- and, thereafter, restore the matter to file of the AO. The Assessing Officer thereafter, passed draft assessment order, against Printed from counselvise.com 2 ITA No.3712 /Del/2024 UIL Electronics India Pvt. Ltd. vs. ACIT, DCIT, NFAC, DRP which the assessee filed its objection before the DRP, Ld. DRP affirmed the order of TPO. Thereafter, final assessment order, which is impugned before us, has been passed by the AO. Assessee has raised so many grounds of appeal, however the controversy involved in this appeal is narrow down to following issues: (a) non-selection of the comparable who are having expenses in the field of R&D equivalent to 2% of the net sell. (b) non-providing of working capital adjustment to the assessee by the TPO. 3. Ld. Counsel for the assessee appearing on behalf of the assessee. Vehemently argued that the TPO has not taken the such comparables which are having R&D expenses to the tune of 2% of total sales and, hence, the approach of the TPO is not correct in the bench marking the international transaction. In simple word, it is the contention of the assessee is that R&D filter may kindly be provided. Similarly, the Counsel for assesse vehemently argued that both the authorities have failed to appreciate that if the working capital adjustment filter would be given to the assessee then no further adjustment is called for in this case. 4. Ld. DR relied upon the orders of the authorities below. However, concurred with the suggestion of the bench that matter requires fresh consideration at the end of TPO. 5. After considering the rival submissions, we observed that facts and figure with respect to the contention made by the assessee before us are not properly appreciated by the lower authorities. For example, the lower authorities have failed to make any comment with respect to the working capital adjustment as computed and submitted by the assessee before them. Therefore, the interest of justice, we remit this matter to the file of TPO for the examine afresh after giving Printed from counselvise.com 3 ITA No.3712 /Del/2024 UIL Electronics India Pvt. Ltd. vs. ACIT, DCIT, NFAC, DRP due consideration to the submissions of the assessee with respect to the filters to be applied for selecting appropriate comparables. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 30/07/2025. Sd/- Sd/- - /- (MANISH AGARWAL) (PRAKASH CHAND YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 30/07/2025 PK/Sr. Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "