TP – Rate approved or deemed to be approved by RBI has to be considered as ALP

ITA No. 6460/Mum/2012

Asst. Year 2008-2009

M/s. ThyssenKrupp Industries India Private Limited

versus

The Addl. Commissioner of Income-tax Range 3(3), Mumbai.

Date of Pronouncement : 27.02.2013

ORDER

Per R.S.Syal (AM) :

This appeal by the assessee is directed against the order dt. 25.09.2012 passed by the Assessing Officer u/s 143(3) read with section 144C(13) of the Income-tax Act, 1961 (hereinafter called `the Act’) in relation to the assessment year 2008-2009.

2. First objection of the assessee in this appeal is against the making of adjustment to the tune of Rs. 5,10,61,123 in respect of international transactions relating to purchase of raw material and components and sale of finished goods. Briefly stated the facts of the case are that the assessee is engaged in the business of providing turnkey services for design, manufacture, supply, erection and commissioning of sugar plants, cement plants, bulk material handling equipment and steam and power generation plants. During the previous year relevant to the assessment year under consideration, it entered into certain international transactions with the Associated Enterprises (AEs) which were duly reported. A reference was made u/s 92CA(1) by the Assessing Officer (A.O.) to the Transfer Pricing Officer (TPO) for computation of Arm’s Length Price (ALP) in relation to such international transactions. The TPO, vide his order dated 10.10.2011, proposed total adjustments to the extent of Rs. 11,01,10,403. Accordingly, the A.O. framed the draft assessment order. The assessee raised certain objections before the Dispute Resolution Panel (DRP) in respect of such proposed adjustments. The DRP gave certain directions to the A.O. The matter was reverted to the TPO for giving effect to the DRP’ s directions. In the order giving effect, the TPO reworked the adjustment on account of import of spares and equipments and sale of equipments / components at Rs. 5,10,61,123 as against its earlier proposed adjustment on this score at Rs. 6,72,06,437. The A.O. in his final order passed on 25.09.2012 made adjustment inter alia, of Rs. 5.10 crore on account of import of spares and equipments and also sale of equipments / components, against which the assessee has come up in appeal before us.