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

ITA 87/HYD/2017Status: DisposedITAT Hyderabad08 June 2018AY 2012-1317 pages
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What did the Tribunal hold?

The Tribunal directed the TPO to recompute margins by including bad debts and provisions for bad and doubtful debts as operating expenses. The issue regarding the rejection of Crystal Voxx Ltd. as a comparable was remitted back to the TPO for fresh consideration. The issue of restricting adjustments to international transactions was also remitted back to the TPO for further opportunity to the assessee to submit evidence.

What were the facts?

The assessee, Hyundai Motor India Engg. Pvt. Ltd., engaged in R&D support services, had international transactions with associated enterprises. The Transfer Pricing Officer (TPO) rejected the assessee's transfer pricing documentation and conducted an independent analysis, proposing an adjustment. The Dispute Resolution Panel (DRP) largely upheld the TPO's findings.

What were the issues?

Whether bad debts and provisions for bad and doubtful debts should be treated as operating expenses for margin computation, and whether adjustments should be restricted to international transactions.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 92CA,Section 144C,Section 139(1),Section 92C(2)

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Income Tax Appellate Tribunal, HYDERABAD BENCH “B”, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

For Appellant: Shri K.R. Vasudevan
For Respondent: Shri K. Srinivasa Reddy

PER S. RIFAUR RAHMAN, A.M.:

This appeal is preferred by the assessee against the order passed u/s 143(3) r.w.s. 92CA r.w.s.144C of the Income Tax Act, 1961 (in short ‘the Act’) dated 05/12/2016 relating to AY 2012-13. 2. Brief facts of the case are, the assessee a private limited company, furnished its return of income for the AY 2012-13 on 26/11/2012 electronically u/s 139(1) of the Income-tax Act, 1961 (in short ‘the Act’) declaring a total income of Rs. 7,67,05,660/- and paid tax amounting to Rs. 134,13,799/-.

2.

1 During the year under consideration, the assessee company had entered into international transactions to an extent of Rs. 7,66,94,920/-, and hence, reference was made to the Transfer Prici

The order continues below.

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