B & R Industrial Automation Pvt. Ltd Vs Additional / Joint/ Deputy / ACIT /ITO (ITAT Pune)
The appeal before the Income Tax Appellate Tribunal, Pune, arose from a final assessment order dated 26 September 2024 passed under sections 143(3) read with 144C(13) and 144B of the Income-tax Act, 1961, pursuant to directions of the Dispute Resolution Panel (DRP). The assessee, engaged in the business of trading programmable logic controllers and importing its trading goods from its holding company, reported a total income of ₹98.70 crore. The Assessing Officer, following transfer pricing adjustments proposed by the Transfer Pricing Officer (TPO), assessed total income at ₹194.66 crore.
During assessment proceedings, the Assessing Officer referred the matter to the TPO under section 92CA to determine the arm’s length price of international transactions. The assessee applied the Transactional Net Margin Method (TNMM) with Operating Profit to Operating Revenue (OP/OR) as the Profit Level Indicator. The TPO rejected the assessee’s selected comparables and finalized a set of five comparables, including Maxim SMT Technologies Private Limited. One of the filters applied by the TPO was that trading turnover should exceed 75% of total sales. Based on the average margin of the selected comparables at 9.60% against the assessee’s margin of 1.46%, the TPO proposed an adjustment of ₹9.57 crore.
