Case Law Details
Mahle Behr India Pvt. Ltd. Vs DCIT (ITAT Pune)
Facts- The appellant is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of manufacture and sale of air conditioning systems and its part and also components thereof for its customers viz. Indica Car of Tata Motors Limited and Mahindra and Mahindra since 1999. The return of income for the assessment year 2012-13 was filed on 30.11.2012 disclosing total income of Rs.9,58,15,960/-. The appellant company also reported some international transactions.
The appellant company also submitted transfer pricing study report wherein, the appellant had adopted TNM Method as most appropriate method in respect of some transactions and CUP Method as the most appropriate method in respect of other transactions. The appellant also computed the margins of the company by adopting Operating Profit/Operating Cost (OP/OC) as Profit Level Indicator (PLI). On noticing of the above international transactions, the AO referred the matter to the TPO for the purpose of benchmarking the international transactions u/s 92CA(1) of the Act.
The TPO suggested upward ALP adjustments of Rs.2,86,90,000/- in respect of international transactions and also suggested upward adjustment of Rs.1,80,65,636/- in respect of software license fees as against the total expenditure of Rs.7,04,59,511/-. Therefore, the TPO suggested upward adjustments of Rs.4,67,55,636/- vide order dated 18.01.2016.
On receipt of the TPO’s order, the Assessing Officer passed draft assessment order dated 29.03.2016 passed u/s 143(3) r.w.s. 144C(1) of the Act making addition on account of TP adjustments of Rs.4,67,55,636/-, disallowance of weighted deduction u/s 35(2AB) of Rs.3,38,82,341/- and disallowance on account of Product Development Expenses treated as capital expenditure of Rs.1,74,00,000/-.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
