HYUNDAI MOTOR INDIA ENGINEERING PRIVATE LIMITED,HYDERABAD vs. DCIT., CIRCLE-2(1), HYDERABAD

The assessee has raised the following Additional Grounds of appeal:

The Ld. AR further submitted that out of the grounds raised in respect of the transfer pricing adjustment, if the contentions of the assessee regarding inclusion of I Services India Private Limited and Cheers Interactive India Private Limited are accepted by the Tribunal, then the remaining transfer pricing grounds raised by the assessee would become academic in nature. It was further submitted that, out of the corporate tax grounds, the assessee is pressing only the adjustment made by CPC amounting to Rs.23,972/- on account of interest on TDS. 8. With regard to exclusion of I Services India Private Limited, the Ld. AR submitted that the Ld. TPO has erred in excluding I Services India Private Limited from the set of comparables on the ground that the details relating to Profit & Loss items and balance sheet items were not available for computing the Related Party Transaction (“RPT”) filter. Inviting our attention to page nos. 49 and 50 of the order of Ld. TPO, the Ld. AR submitted that the details relating to Profit & Loss items as well as balance sheet items have already been specifically extracted by the Ld. TPO in the order itself. Therefore, according to the Ld. AR, the observation of the Ld. TPO that the relevant details were not available is factually incorrect. The Ld. AR further submitted that once the details of related party transactions are available on record, the Ld. TPO ought to have computed the RPT filter and thereafter decided the issue regarding inclusion or exclusion of the said company from the set of comparables. It was further submitted that the company was wrongly excluded without carrying out proper verification of the RPT percentage. Accordingly, the Ld. AR prayed before the Bench that the issue may be set aside to the

On perusal of the above, we find that the amounts relating to Profit & Loss items as well as balance sheet items have been specifically mentioned therein. However, the Ld. TPO excluded the said company from the set of comparables observing that in the absence of complete details of Profit & Loss items and balance sheet items, the RPT filter could not be worked out. On perusal of the observations made by the Ld. TPO, we find contradiction in the findings recorded by him, in as much as the relevant details relating to related party transactions have already been extracted in the order itself. Therefore, prima facie, the observation of the Ld. TPO that the details were not available does not appear to be factually correct. Since factual verification regarding the exact computation of the RPT percentage in respect of I Services India Private Limited is required, we deem it proper to set aside this issue to the file of Ld. AO/TPO with a direction to verify the details available on record, correctly compute the RPT filter in accordance with law and thereafter consider inclusion of I Services India Private Limited in the final set of comparables after providing adequate opportunity of being heard to the assessee. 12. As far as the exclusion of Cheers Interactive India Private Limited by the Ld. A.O/TPO from the set of comparables is concerned, the Ld. AR invited our attention to para nos. 2.30 to 2.30.3 of the order of the Ld. DRP, wherein the observations of the Ld. TPO have also been reproduced by the Ld. DRP. The Ld. AR submitted that the Ld. TPO has considered the RPT expenses at Rs.19,71,90,581/- and accordingly computed the RPT filter at 29.41%, which according to the Ld. AR is factually incorrect. The Ld. AR further submitted that the Ld. DRP

On perusal of the above, we find that the Ld. TPO has calculated the RPT filter by including the payment made by the company to its key managerial personnel in India. We further find that the Ld. DRP dismissed the contention of the assessee on the ground that no details/bifurcation of RPT expenses were available. However, we have gone through note no. 30 of the audited financial statements of Cheers Interactive India Private Limited, which is to the following effect:

On perusal of the above, we found that the details of RPT expenses have been specifically provided therein. We further found that the said amount includes payment made to key managerial personnel in India amounting to Rs.13,28,45,599/-. Prima facie, such payment made to key managerial personnel in India cannot be treated as an international transaction for the purpose of computing the RPT filter. Therefore, in our considered opinion, the amount of Rs.13,28,45,599/- requires exclusion while working out the RPT percentage of the said comparable company. Since proper factual verification and re-computation of the RPT filter are required, we deem it proper to set aside this issue to the file of Ld. TPO with a direction to exclude the amount of Rs.13,28,45,599/- paid to key managerial personnel in India while computing the RPT filter and thereafter reconsider inclusion of Cheers Interactive India Private Limited in the final set of comparables in accordance with law after providing adequate opportunity of being heard to the assessee.

With regard to the issue relating to corporate tax adjustment, the Ld. AR submitted that an amount of Rs.23,972/- on account of interest on TDS was already disallowed by the assessee while filing its return of income. However, while processing the return under section 143(1) of the Act, the CPC again added the very same amount. It was further submitted that while passing the final assessment order, the Ld. AO adopted the income computed under section 143(1) of the Act, as a result of which the amount of Rs.23,972/- stood added twice in the hands of the assessee. Inviting our attention to para no. 8(A)(e) of Annexure – Other Information forming part of the intimation issued under section 143(1) of the Act, the Ld. AR demonstrated that the assessee itself had already disallowed an amount of Rs.23,972/- under section 40(a)(ii) of the Act while filing the return of income. The Ld. AR further invited our attention to para no. 7(f) of Annexure – Other Information to the intimation issued under section 143(1) of the Act and demonstrated that CPC again made addition of Rs.23,972/- while processing the return. Therefore, according to the Ld. AR, there is double addition of the same amount in the hands of the assessee. Accordingly, the Ld. AR prayed before the Bench for deletion of the said addition. 18. Per contra, the Ld. DR submitted that the issue requires factual verification at the end of the Ld. AO with regard to whether the amount of Rs.23,972/- has actually been added twice in the hands of the assessee. 19. We have heard the rival submissions and perused the material available on record. We have gone through para no. 8(A)(e) of Annexure – Other Information forming part of the

On perusal of the above, we find that the assessee itself had made disallowance of Rs.23,972/- under section 40(a)(ii) of the Act in its return of income. We have also gone through para no. 7(f) of Annexure – Other Information to the intimation issued under section 143(1) of the Act, which is to the following effect:

On perusal of the above, we find that an amount of Rs.23,972/- has again been added by CPC while processing the return of income of the assessee. Prima facie, the same indicates double addition of Rs.23,972/- in the hands of the assessee. However, since the issue requires factual verification at the end of the Ld. AO, we deem it proper to set aside this issue to the file of Ld. AO with a direction to verify whether the amount of Rs.23,972/- has been added twice in the hands of the assessee and, if the same is found to be correct, then delete the duplicate addition in accordance with law after providing adequate opportunity of being heard to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 15th May, 2026. Sd/- Sd/- (RAVISH SOOD) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, dated 15th May, 2026. Vinodan/sps Copy to: S.No Addresses 1 M/s. Hyundai Motor India Engineering Private Limited, Survey No.5/2, 5/3 Opp: Hitec City Railway Station, Izzat Nagar, Izzat Nagar, Lingampally Maandal R.R. Distt. Hyderabad 500084 2 Dy. CIT, Circle 2(1) Signature Towers, Hyderabad 500084 3 Pr. CIT – Hyderabad/Director of Income Tax (Int.Taxation) Hyderabad 4 DRP-1 Kendriya Sadan, 4th Floor, C Wing Bengaluru 560034 4 DR, ITAT Hyderabad Benches 5 Guard File By Order