IN THE ITAT MUMBAI BENCH ‘K’
Ratilal Becharlal & Sons
Versus
Joint Commissioner of Income-tax, Range – 18(3)
IT APPEAL NO. 7876 (MUM.) OF 2011
Assessment Year 2007-08
Date of Pronouncement – November 7, 2012
ORDER
Per Bench
The present appeal preferred by the assessee, is directed against the final impugned assessment order dated 21st October 2011, which has been passed in pursuance of the directions given by the Dispute Resolution Panel-II (for short “DRP”) under section 144C(5) of the Income Tax Act, 1961 (for short “the Act”) for the quantum of assessment for A.Y. 2007-08.
2. In grounds no.1 to 6, the assessee has challenged the addition/adjustment of Rs. 3,70,87,177, towards Arm’s Length Price (for short “ALP”) in respect of its transactions with Associate Enterprises (for short “A.E”) amounting to Rs. 49,8100,499, during the year.
3. Brief facts of the case are that the assessee is a partnership firm engaged in the business of manufacturing and sale of cut and polished diamonds, which are being exported. During the year, the assessee had gross sales of Rs. 464,90,63,687, as against this, the sales to A.E. amounted to Rs. 49,81,00,499. The assessee had disclosed its net profit to the cost ratio of 4.86%. The profit level indicator (for short “PLI”) was worked out by taking net profit before tax and excluding non-operating expenditure like debtors written-off, final cost and non-operating income. The final profile of the assessee vis-a-vis the A.E. transactions and non-A.E. transaction and the net profit during the year were as under:-
