R.A.K.CERAMICS INDIA PRIVATE LIMITED,SECUNDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(1), HYDERABAD

O R D E R Per Shri S.S. Godara, J.M. : This assessee’s appeal for Asst. Year 2014-15 arises against the DCIT, Circle 3(1), Hyderabad’s assessment dt.30.10.2018 framed in furtherance to the Dispute Resolution Panel (DRP)-I, Bangaluru’s direction dt.5.9.2018 in F. No.24/DRP-1/BNG/2081-19 in proceedings u/s.143(3) r.w.s.144C(13) of the Income Tax Act, 1961 ('the Act'). Heard both the parties. Case file perused. 2. The assessee raises the following substantive grounds in the instant appeal :

6. On the facts and in the circumstances of the case and in law, the Ld. A.O. has erred in not granting the MAT credit carried forward from previous assessment years. 3. Learned counsel submits at the outset that the assessee restricted his pleadings only qua wrongful inclusion of two comparables M/s. HSIL Ltd and M/s. Cera Sanitary Ware Limited by the Transfer Pricing Officer (TPO) in his order dt.31.10.2017 and upheld in the DRP’s direction dt.5.9.2018 as under :

“ 3.1.1. HSIL Limited > Functionally not comparable – diversified activities. > Segments financials not available. > Engaged in R & D activities. 3.1.1.1 Having considered the submissions, we note that the TPO has given detailed reasons for considering this company as functionally comparable, referring to the annual report of this company. We note that the assessee has not controverted the factual findings of the TPO. Therefore we upheld the selection of this comparable. 3.1.2 Cera Sanitary Ware Limited; and > Functionally not comparable. > Segments financials not available. > Engaged in R & D activities. 3.1.2.1 Having considered the submissions, we note that the TPO has given detailed reasons for considering this company as functionally comparable, referring to the annual report of this company. We note that the assessee has not TPO. Therefore we upheld the selection of this comparable.” 4. Learned department representative fails to dispute that the DRP herein has nowhere taken into consideration the assessee's detailed objections quoting functional similarity, lack of the relevant segmental financials and engagement of the said twin entities in R & D activities, whilst declining the impugned objection in a cryptic manner.