THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1)(1), VADODARA vs. M/S. SABIC INNOVATIVE PLASTIC INDIA PVT. LTD., VADODARA

Grievance raised by the appellant is as follows:

The issue in appeal lies in a narrow compass of material facts. In the present proceedings before the CIT(A) in the second round, which was a result of the matter being set aside to the file of the CIT(A) by a coordinate bench, the CIT(A) accepted the plea of the assessee that Ciba India Limited and EI Dupont India Pvt Ltd were valid comparables and noted that “undisputedly, the AO/TPO has considered segmental accounts in the case of appellant and, accordingly, made adjustments in the margins of trading operations only………..segmental accounts in the case of CIBA India Limited have to be considered for benchmarking since the same are available”. Learned CIT(A) however, as a measure of

We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.

We find that the CIT(A) has remitted the matter for verification of correct margins at the assessment stage. It is for the Assessing Officer to take a call on what is correct computation of segmental margin, and, as an integral part thereof, correct allocation of common expense. Yet, rather than doing this exercise diligently, he is in appeal before us on an altogether new plea that certain expenses are unallocable. If the expenses are unallocable, the expenses must not be allocated which will increase the margins of comparables- something that the revenue authorities cannot be aggrieved of. However, where there is a reasonable basis for allocation of such expenses, the Assessing Officer can always adopt the same. All the issues with regard to the computation of correct margins are open before him. In our humble understanding, there is no occasion to be aggrieved of the directions of the CIT(A). In any case, no specific issues were raised before us in support of the grievance raised in the appeal. We have carefully perused the written submissions filed by the TPO as well, and we find no specific issues, with respect to the grievance before us, raised therein.

In view of the above discussions, as also bearing in mind entirety of the case, we confirm the conclusions arrived at by the CIT(A) on this aspect, and decline to interfere in the matter. In the result, the appeal is dismissed. Pronounced in the open court today on the 8th 7. day of March, 2019.