Rockwell Automation Private Limited Vs ACIT (ITAT Delhi)
In this case involving , the assessee challenged the assessment order passed under Section 143(3) read with Section 144C(13) of the Income-tax Act for AY 2017-18. The appeal was restored by the ITAT through a miscellaneous application only for adjudication of Ground Nos. 5, 6, and 7 relating to transfer pricing adjustments, corrected segmental financials, and working capital/risk adjustments.
With respect to Ground No. 5, the assessee argued that during assessment proceedings it had submitted updated and corrected margins for certain comparable companies. However, the Transfer Pricing Officer (TPO) rejected the corrected computations and retained the margins proposed earlier, stating that the computations had been rechecked under Rule 10TA of the Income Tax Rules, 1962. The assessee also contended that objections regarding the corrected margins were specifically raised before the Dispute Resolution Panel (DRP), but no specific directions were issued.
Regarding Ground No. 6, the assessee submitted that an inadvertent error had occurred in the segmental accounts. An international transaction with Associated Enterprises amounting to Rs. 79,91,176 relating to erection, commissioning, and services connected with the assembly/manufacturing segment had mistakenly been included in the Engineering Design Services segment. A rectification application was filed before the TPO seeking correction of the mistake. The assessee also raised a specific objection before the DRP requesting consideration of the corrected segmental financials. The DRP directed the TPO to verify the claim and, if found correct pursuant to rectification proceedings under Section 154, exclude the transaction from the Engineering Design Services segment. However, the TPO did not consider the rectification application.
