TOYOTA INDUSTRIES ENGINE INDIA PRIVATE LIMITED,BANGALORE vs. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-7(1)(1), BANGALORE

ITA 173/BANG/2022Status: DisposedITAT Bangalore13 June 2022AY 2017-182 pages

AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal modified its earlier order to correct an inadvertent error. It held that the PLI should be computed as gross profit on sales, following its own previous decisions for the assessee's own case.

What were the facts?

The assessee sought to compute the profit level indicator (PLI) as gross profit on sales instead of operating profit on total cost. This appeal concerns the auto components manufacturing segment.

What were the issues?

The primary issue was the correct method for calculating the profit level indicator (PLI) for transfer pricing purposes. Specifically, whether to use gross profit on sales or operating profit on total cost.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned in the provided text, but related to transfer pricing provisions.

AI-generated summary — verify with the full judgment below

Toyota Industries Engine India Vs. National e-Assessment Centre, Private Ltd., Delhi. / Plot No.9, Phase 2, Jigani Industrial Area, Jigani, The Assistant Commissioner Bangalore – 561 105. of Income-tax, PAN: AAACK 7425Q Circle 7(1)(1), Bangalore. APPELLANT RESPONDENT C O R R I G E N D U M Per Padmavathy S., Accountant Member This appeal was disposed of by this Tribunal vide order dated 13.05.2022.

Certain inadvertent errors have crept in paras 4 & 5 of the order of the Tribunal wherein the words ‘operating profit on sales’ are mentioned instead of ‘gross profit on sales’. Therefore paras 4 & 5 of the order are modified and substituted to read as under:-

“4. In this appeal we are concerned with the determination of Arm’s Length Price (ALP) in the auto components manufacturing segment. Pursuant to the order of the DRP, the only relief which the assessee seeks is with regard to the computation of profit level indicator (PLI) as done by the TPO which was operating

Corrigendum to IT(TP)A No.173/Bang/2022 Page 2 of 2 profit on total cost. The assessee seeks PLI to be gross profit on sales. No other grounds were addressed insofar as auto components manufacturing segment is concerned.

As far as prayer of the assessee for adopting PLI as GP/Sales is concerned, we notice that the coordinate bench of the Tribunal in assessee’s own case for AY 2010-11 in IT(TP)A no.485/Bang/2015 dated 18/05/2016 accepted the contention of the assessee and directed that the PLI should be adopted as GP/Sales. This is followed by the Tribunal for the AY 2011-12 also in assessee’s own case. The relevant observations of the Tribunal in assessee own case for the assessment year 2010-11 is reproduced below:-”

Except for the above modification, there is no other change in the order of the Tribunal dated 13.05.2022.

Recent GST High Court judgments

Search GST case law →