JINFEI TRADING INDIA PRIVATE LIMITED,GURUGRAM vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 13(1), DELHI, NEW DELHI

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ITTPA 10/DEL/2026Status: DisposedITAT Delhi05 June 2026AY 2022-236 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the assessee had filed a rectification application under section 154 of the Act before the Assessing Officer, which was pending. The Ld. TPO had indeed passed a rectified order on 10-11-2025, reducing the transfer pricing adjustment to Nil, in compliance with the DRP's directions. This rectified order was not considered by the Assessing Officer when framing the final assessment. Since the rectification application was still pending before the AO, the Tribunal found that the present appeal had become infructuous. The appeal was accordingly dismissed with liberty to the assessee to move a restoration application if the rectified order was not considered by the AO after its disposal, and if the final assessment order remained uncorrected.

What were the facts?

The assessee, Jinfei Trading India Private Limited, is appealing an assessment order for Assessment Year 2022-23, passed by the Deputy Commissioner of Income Tax, Circle 13(1), Delhi, based on an order by the Transfer Pricing Officer (TPO) under section 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961. The assessee trades two-wheeler alloy wheels manufactured by its Chinese associate enterprise to Indian OEM customers. The case was selected for scrutiny due to substantial payments to non-GST registered entities and a large difference in opening and closing stock. The TPO initially proposed a transfer pricing adjustment of Rs. 6,87,56,670/-. Following directions from the Dispute Resolution Panel (DRP) to allow working capital adjustments, the TPO passed a rectified order on 10-11-2025, reducing the adjustment to Nil. However, the Assessing Officer (AO) in the final assessment order failed to consider this rectified order.

What were the issues?

1. Whether the assessment order passed by the Ld. AO under section 143(3) r.w.s. 144C(13) r.w.s. 144B, based on the Ld. TPO's order, is bad in law. (Question of law) 2. Whether the Ld. AO erred in making an addition of Rs. 6,87,56,670/- towards transfer pricing, without considering the Ld. TPO's rectified order dated 10-11-2025, which reduced the adjustment to Nil. (Question of mixed law and fact, concerning Section 144B and Section 154) 3. Whether the Ld. AO erred in initiating penalty proceedings under section 270A(7). (Question of law) 4. Whether the Ld. AO erred in levying interest under section 234B. (Question of law) Assessee's Contention: The AO failed to consider the TPO's rectified order dated 10-11-2025, which reduced the transfer pricing adjustment to Nil. The AO's final assessment order was based on the earlier, unrectified order. Revenue's Contention: The Ld. DR fairly conceded the facts presented by the assessee.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 144B,Section 154,Section 270A(7),Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “H”, DELHI

Before: SH. RAMIT KOCHAR & SH. SUDHIR KUMAR

For Appellant: Ms. Aggarta Gupta, CA
For Respondent: Shri S.K. Jadhav, CIT(DR)
Hearing: 21/05/2026Pronounced: 05/06/2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H”, DELHI

BEFORE SH. RAMIT KOCHAR, ACCOUNTANT MEMBER AND SH. SUDHIR KUMAR, JUDICIAL MEMBER

IT(TP)A No.10/DEL/2026 Assessment Year: 2022-23 Jinfei Trading India Private Vs. Deputy Commissioner of Limited Income Tax, Circle 13(1) 10th 1001, Floor Erose Delhi Corporate Park Sector-02 IMT Manesar Gurugram Haryana- 122052 PAN No. AADCJ4552A (APPELLANT) (RESPONDENT)

Appellant by Ms. Aggarta Gupta, CA Respondent by Shri S.K. Jadhav, CIT(DR)

Date of hearing: 21/05/2026 Date of Pronouncement: 05/06/2026 ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER: This appeal by the assessee is directed against the Assessment order dated 20-11-2015 pertaining to A.Y. 2022-23, passed by the Ld. TPO under section 143(3) r.w.s.144 C (13) read with section 144B of the Income Tax Act,1961, (in short ‘the Act’).

2.

The assessee has raised the following grounds in appeal: 1. On the facts and in the circumstances of the case and in law, the order passed by the Ld. AO under section 143(3) r. w.s. 144C(13) r.w.s.144B based on order issued by the Ld. TPO is bad in law. 2. On the facts and in the circumstances of the case and in law, the order passed by the Ld. AO erred in making an addition of Rs.6,87,56,670/- towards transfer pricing on the basis of the order passed by the Ld. TPO on 16-10-2025 without considering the fact that the said order dated 16-10- 2025 stands rectified by the Ld. TPO under section 154 vide its order dated 10-11-2025 wherein the adjustment determined in the original order dated 16-10-2025 of Rs.6,87,56,670/- was reduced to Nil. 3. On the facts and in the circumstances of the case and in law, the order passed by the Ld. AO erred in initiating the penalty proceedings under section 270A (7) of the Act. 4. On the facts and in the circumstances of the case and in law, the order passed by the Ld. AO has erred in levying interest under section 234B of the Act. 5. Assessee craves leave to add delete withdraw and modify any / all grounds of appeal at a later stage.

3.

The brief facts of the case are that the assessee company is

primarily engaged in the business of trading of two-wheeler

alloy wheels manufactured by its associate company in China.

The company acts as a supplier of the Alloy wheels to the OEM

customers in India. Company purchases traded goods from its

AE and sells them only to the identified OEM customers in

India. The assessee company has filed return of income for the

A.Y.2022-23 on 22-11-2022 declaring total income of

Rs.12,86,55,110/-. The said return was processed u/s 143(1) of

the Act. The case of the assessee was selected for scrutiny

through CASS for the following reasons:

(i) Substantial payments shown to entities not registered under

GST

(ii) Large, difference in the opening stock of current year (in

trading & Manufacturing account) and closing stock of previous

year shown in P&L a/c as per Return of Income.

4.

The case of the assessee company referred to Transfer Pricing

Officer to determine the “Arm’s Length Price” in respect of the

international transactions undertaken by the assessee during

the F.Y.2021-22 relevant to the A.Y.2022-23. In the T.P. study

the assessee claims the net operating margin earned by Jinfei

India to its operating revenue in F.Y.2021-22 is 6.38%. The Ld.

TPO opted the TNMM method and after applying the filters

selected the four comparables. The Ld. TPO passed order on 14-

01-2025 proposing TP adjustment of Rs. 6,87,56,670/-to the

taxable income. The Assessing Officer issued the draft

assessment order in the compliance of the Ld. TPO order.

Being aggrieved the draft assessment order the assessee filed

the objections before the Hon’ble DRP. The Hon’ble DRP after

considering the submissions made by the assessee issued the

directions under section 144 C (5) of the Act on 26-09-2025 and

directed the Ld. TPO to compute Arm’s length price after

allowing working capital adjustments.

5.

In the compliance of the Hon’ble DRP the Ld. TPO passed the

order dated 16-10-2025, giving effect of the direction, but

inadvertently did not compute the working capital adjustments.

The assessee filed a rectification application on 23-10-2025

before the Ld. TPO to rectify the error. The Ld. TPO passed a

rectified order u/s 154 of the Act on 10-11-2025 rectifying its

order dated 16-10-2025. In the rectified order the adjustment

proposed was reduced to Rs. NIL after allowing the working

capital adjustments.

6.

The Assessing Officer in the final assessment order

inadvertently has not considered the rectified order passed by

the Ld. TPO.

7.

We have heard the parties and perused the material available

on record. The Ld. AR of the assessee submitted that the

Assessing Officer did not consider, the Ld. TPO rectified order at

the time of framing the final assessment order wherein the

transfer pricing adjustment of Rs.6,87,56,670/- was reduced to

Nil. The Ld. DR fairly conceded the facts. We find that the

rectification application under section 154 of the Act moved by

the assessee is pending for disposal before the Assessing officer.

The Ld. TPO has passed the rectified order dated 10-11-2025

in the compliance of the Hon’ble DRP, direction wherein the

Transfer Pricing adjustment of RS.6,87,56,670/- was reduced

to Nil, which was not considered by the Assessing Officer at the

time of framing the final Assessment. Since the rectification

application is still pending before the Assessing Officer, the

present appeal has become infructuous. Accordingly, the appeal

is dismissed with the liberty to the assessee to move the

restoration application to restore the appeal, after the disposal

of the rectification application if the rectified order passed By

Ld. TPO, not considered at the time of passing the final

assessment order by the Assessing Officer.

8.

In the result the appeal of the assessee is dismissed.

Order pronounced in the open court on 05.06.2026.

Sd/- Sd/- (RAMIT KOCHAR) (SUDHIR KUMAR) ACCOUNTANT MEMBER (JUDICIAL MEMBER) SR BHATNAGGAR Date: 05.06.2026 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) ` 5. DR: ITAT ASSISTANT REGISTRAR ITAT DELHI

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