FIBERHOME INDIA (P) LTD,NEW DELHI vs. ACIT, CIRCLE-7(1), NEW DELHI

2.4 That the learned AO/TPO/DRP has erred both in law and on facts in considering M/s Avantel Ltd., a non-comparable company as comparable company for the purpose of making an adjustment to the instant international transactions of import of goods for manufacturing of telecommunication equipment. 2.5 That the learned AO/TPO/DRP have also erred both in law and on facts in not making the working capital adjustment in the margin of comparable companies concerning international transactions related to the import of goods for the manufacturing of telecommunication equipment, despite the working capital adjustment being duly provided to learned AO/TΡΟ 2.6 That the learned TPO has erred both in law and on facts in not following the direction of the learned Dispute Resolution Panel u/s 144C(5) of the Act.

3. That the learned AO/TPO has erred both in law and on facts by not making the proportionate adjustment in relation to international transaction only i.e., restricting the transfer pricing adjustment to the transaction with the AE on proportionate basis relating to the import of goods for the manufacturing of telecommunication equipment by overlooking the direction of the learned Dispute Resolution Panel u/s 144C(5) of the Act.

4. That the learned AO/TPO/DRP has erred both in law and on fats in not using financial information of the comparable companies relating to the financial year ("FY") 2020-21 although such information was not available when the appellant maintained documentation as per the requirement of the Act.

6. That the learned AO/TPO/DRP have also erred both in law and on facts in making an addition of Rs. 19,95,926/- to arms length price in respect of international transaction relating to interest on External Commercial Borrowings (ECBs') in an order dated 29.10.2024 u/s 143(3)/144C(13) of the Act read with order dated 30.10.2023/26.10.2024 u/s 92CA(3) of the Act and order dated 30.9.2024 u/s 144C(5) of the Act. 6.1 That the learned AO/TPO/DRP have also erred both in law and on facts in neglecting the ALP computation in respect of international transaction relating to interest payment on ECB's presented in the transfer pricing report using widely popular databases ie. Refinity LPC Loan Connector and the RBI's published monthly details of ECBs, FCCBs, and RDBs and making in accurate accusations regarding the alleged use of the RBI ceiling as the ALP, subsequently recomputing the ALP, actions that are incorrect and bad in law.

That the learned AO/TPO/DRP have also erred both in law and on facts in comparing the interest rate on unsecured loan (ECB) availed from AE with debentures interest rate issued by big conglomerate in different time periods. 6.3 That the learned AO/TPO/DRP have also erred both in law and on facts in making an addition in interest paid on External Commercial Borrowings (ECBs) based on interest rates, despite the loan terms and conditions (including interest rates) of the ECB being previous assessed and deemed at arm's length by the TPO and AO in financial year 2015-16 and 2014-15; and in the absence of any change in the terms, including interest rates, since the inception of the loan, the same interest rate on ECB in line with the loan agreement cannot be deemed non-arm's length in subsequent years.

7. That order of assessment dated 29/10/20/24has been framed w/s/148/3 of the Act is otherwise without jurisdiction therefore, deserves to be quashed as such.

8. That the learned Assessing Officer has further erred both in law and on facts in levying interest of Rs.17,06,208. u/s 234A of the Act, and interest of Rs. 2,44,55,648/- u/s 234B of the Act which are not leviable on the facts and circumstances of the case of the appellant company.”

3.1 The assessee, Fiberhomes India Private Limited, is a subsidiary company of Fiberhome Telecommunication Technologies Co, Limited, China, a global leader in proving next-generation telecommunications solution for operations around the world. It was incorporated on 18th April 2012 at New Delhi. Fiberhomes engaged in the business of manufacturing of telecommunication equipments and providing repairing, maintenance and other services of telecommunication equipments in India. During the year, the assessee (Fiberhome) was engaged in Trading of telecommunication equipment which was an independent transaction and providing repair, maintenance and other services of telecommunication equipments in India which was an independent transaction.

3.2 The assessee is engaged in manufacturing of telecommunication equipments and trading and services related thereto. During A.Y. 2021-22 the International Transactions entered into by the assessee company are as under: S. Type of Associated Enterprises Method Total Value of No. Transaction Selected Transaction (Rs.) 1. Import of raw Wuhan Fiberhome International TNMM 1,13,07,225 material Technologies Co Ltd, China 2. Fiberhome Telecommunication 55,15,33,203 Technologies Co Ltd, China 3. Sale of Goods Wuhan Fiberhome International TNMM 2,57,66,231 Technologies Co Ltd, China

4. Provision of Fiberhome Telecommunication TNMM 8,17,57,342 Software Technologies Co Ltd, China Development Services 5. Payment of Fiberhome Telecommunication CUP 28,88,400 Interest on Loan Technologies Co Ltd, China 6. on ECB CUP 89,93,130 3.3 The Transactional Net Margin Method (TNMM) applied by the assessee for Benchmarking was accepted by Transfer Pricing Officer 3.4 Several notices under Section 92CA(2) of the Act were issued by the Ld. TPO and replies thereto were duly furnished by the assessee. Finally, on 30.10.2023 order under Section 92CA(3) of the Act was framed proposing

adjustment of Rs. 26,60,76,304/- in respect of import of goods and Rs. 19,95,526/- in respect of interest on ECBs. 3.5 Thereafter, draft order under Section 144C of the Act was framed on 17.12.2023, recomputing loss of Rs. 7,03,94,093/- at an income of Rs. 19,76,50,737/- by proposing addition of Rs. 26,80,44,830/- on account of Transfer Pricing Issues. 3.6 Aggrieved by the draft assessment order, the assessee filed objections before the Ld. DRP, challenging the additions proposed by the Ld. AO in the draft assessment order. The Ld. DRP framed directions under Section 144C of the Act vide order dated 30.09.2024. 3.7 Consequent to the Directions of the Ld. DRP under Section 144C of the Act, the Ld. TPO issued notice dated 04.10.2024 to the assessee to give effect to the directions of the Ld. DRP. In compliance thereto the assessee filed its reply dated 08.10.2024. Subsequently, the Ld. TPO passed order dated 26.10.2024 giving effect to the Directions of the Ld. DRP. Thereafter, on 29.10.2024, order under Section 143(3) r.w.s. 144C(13) r.w.s. 144B of the Act was framed, giving effect to the DRP directions dated 30.09.2024. Aggrieved against it the assessee is in appeal before us.

3.8 It is the case of the assessee that the Ld. TPO has grossly erred in not allowing working Capital Adjustment to the PLI for appellant and the comparables even after the same ahs been allowed the Ld. DRP in their following directions dated 30.09.2024:

“16.4 Accordingly, TPO is directed that adjustment be made for working capital to improve comparability. The taxpayer is however directed to provide the TPO with reliable and accurate data in respect of each segment so as to facilitate computation of the working capital adjustment.”

In this regard he has referred the notice dated 04.10.2024 issued by the DC/ACIT TP 1(2)(2), Delhi directing the assessee to furnish requisite information along with supporting documents, as directed by the Ld. DRP so as to enable the office to give effect to the subject order, as appearing at page 43 of the paper book filed before us. It also appears from page Nos. 44 to 49 being the reply dated 08.10.2024 particularly para 2.3 thereof that detailed computation of corrected OP/OR after working capital adjustment of each of the comparables, namely, Cygnus Micro Systems Pvt. Ltd.; Valient Communications Ltd.; Exicom Tele- Systems Limited; Frog Cellsat; Precision Electronics Ltd.; Matrix Comsec Pvt. Ltd.; and V. Link systems Pvt. Ltd.; & Avantel Ltd., for the subject transaction on the basis of information contained in the annual report was enclosed along with methodology to compute the same, which was specifically provided to the Department in a pen-drive being Annexure A-5.

3.10 As it was the case of Revenue that though the assessee has provided certain work but they are not backed up by the annual report of the company and therefore, failed to provide the complete and verifiable data and thus complying with the direction of the Ld. DRP working capital adjustment is not being provided as is evident from the order dated 29.10.2024 passed by the Assessing Officer.

4.1. In that view of the matter the addition would be reduced to Rs. 7,39,05,696/- as contended by the Ld. AR appearing for the assessee as the comparables at Sl. Nos. vii) & viii), the data is available before the TPO.

4.2. In fact so far as the comparables are concerned the assessee prayed to include the following comparables:

V Link Systems Pvt. Ltd. Proposed Accepted by DRP but by TPO removed by TPO for data of FY 2020-21 not being available 11. HFCL (Telecom Products TP Study Rejected by TPO and not Segment) challenged by appellant in DRP 4.3 Under these facts and circumstances of the matter comparables appearing at sl. Nos. 7 & 8 data whereof since made available to the Ld. TPO, considered by the Ld. TPO and passed order accordingly. So far as the comparable at Sl. No. 9 is concerned further case made out by the assessee is that though the comparable at Sl. No. 9, namely, Exicom Telesystems Ltd. (Telecom Segment) was accepted by the Ld. DRP the same was due to technical mistake of the TPO removed from final PLI calculation.

4.4 In this regard the assessee has submitted as follows:

“9.5 Exicom Tele-systems Limited - Telecom Products Segment (i) The company provides efficient, reliable and cost-effective Power Electronics Solution for global telecom, IT and other related industries. The company is presently engaged in the business as manufacturers, assemblers etc. of telecom power backup solutions equipment and lithium ion batteries. It has two segments namely, telecom products and solar projects. (ii) In this regard, it is submitted that the learned DRP has already accepted the company as comparable in its Directions. The learned Transfer Pricing Officer also accepted the same, however, the learned Transfer Pricing Officer made clerical error while not including the same in final calculation of PLI. As this is a mechanical mistake on part of Transfer Pricing Officer, it is prayed that the order be directed to be rectified as such. Relevant Extract from page 8 of the final Transfer Pricing Officer order is as follows: "DRP Direction: The Panel had already discussed regarding comparability of Tejas Network. Regarding the remaining 3 comparables, the Hon'ble

DRP stated that they are functionally broadly similar to the assessee enterprise and further directed to include the comparables if the data of F.Y. 2020-21 is available. TPO Comment: As per direction, the data was reverified. The financials of Fibcom India Ltd. & Cygnus Micro Systems Pvt. Ltd. are still not available and hence the same is not being considered. Therefore, the remaining 1 comparables i.e. Exicom Tele-systems Limited is being added to the list of comparables for import of goods for manufacturing of telecommunication in the later part of this order.” M/s Avantel Ltd 10 That the learned AO/TPO/DRP has erred both in law and on facts in considering M/s Avantel Ltd., a non-comparable company as comparable company for the purpose of making an adjustment to the instant international transactions of import of goods for manufacturing of telecommunication equipment. 10.1 In this regard, it is submitted that the appellant would like to challenge the inclusion of Avantel Ltd. as a comparable company even though the same was included in TP Study of the appellant. Based on annual report, Avantel Ltd. is functionally different company from assessee company as Avantel is engaged in high end satellite communications technologies which makes it incomparable with assessee company. 10.2 As per page 83 of Annual Report of Avantel Ltd for FY 2020-21 (page 42 of Annexure to this Synopsis), Company Overview: Avantel Limited is a company engaged in manufacturing of wireless front- end, Satellite Communication, Embedded systems, Signal Processing, Network management and Software development and rendering related customer support services, and having an in-house R&D facility at Vishakhapatnam, Andhra Pradesh. Further as per web page of Avantel

(http://www.avantel.in/technologies.php) -

"We specialize in integrating technologies related to wireless front-end, Satellite Communication, Embedded systems, Signal Processing, Network management and Software development. We leverage technology for a purpose beyond profit. Our product design and development through in- house R & D" 10.3 In this regard, it is submitted that the company under consideration is primarily engaged in providing goods and services to defense sector of the Indian government and thus the profitability is closely linked to the government contracts deriving from the crucial sector of defense equipment, which is apparent from the fact that Avantel Ltd. has consistently shown higher profits compared to another companies selected by appellant and/or learned TPO. The same is evident from the Page 42 of the Annual Report of Avantel Ltd. (2020-21) reproduced here as follows: "Your company operates mainly in the strategic segment and any consolidation on Revenue/Capital procurement by the defence services would open new avenues for business. We expect positive influence of the increased defence outlays on pending procurement cases of the strategic customers leading to order conversion and enhanced enquiries for Avantel's product offerings." Page 29 of the Annual Report also mentions as follows (page 39 of Annexure to this Synopsis): "b) Research and Development The Company's Research and Development center is recognized by the Department of Scientific and Industrial Research (DISR), Ministry of Science and Technology, Government of India" 10.4 Without prejudice to anything contained in para 9.2 of the submission, it is further submitted that Avantel Ltd. has high value of R&D expenditure of Rs. 6,07,34,337/- during the FY 2020-21 out of total expenses of Rs. 60,06,57,225/-(Page 78 of the annual report at Page 41 of Annexure to this Synopsis), i.e. approximately 10% of total expenses amount to R&D expenses. It is brought to your honors special notice that Tejas Network Ltd. was rejected as a comparable by the learned Transfer Pricing Officer and consequently the learned DRP for having large portfolio of development products and thus the acceptance of Avantel Ltd. while rejecting Tejas Network Ltd. is logically inconsistent and amounts to cherry picking of comparables for the purpose of making adjustment to the case of the appellant, which is wholly illegal and untenable as per transfer pricing legislation. Reliance is placed on the following judgments: i) [ITA No. 4865/Mum/05 (2010-TII-19-ITAT-MUM-TP)] M/s Cheminova India Limited

Hon'ble ITAT affirmed that the Revenue cannot arbitrarily select data for comparability analysis which is favorable to the revenue for comparability analysis without considering all the relevant factors. ii)

(Del) 07, Assessment Year 2003-04 Toshiba India Pvt Ltd Vs Assistant Commissioner of Income tax "Upon careful consideration of the rival submission and perusal of the records, we find ourselves in agreement with the ld. CIT(A) that the AO has rejected the profit margin declared by the Assessee in an unjustified manner. He has selected four companies which were rejected by the Assessee company. The Assessee submitted that these companies were rejected for the selection because they either had insufficient description information, or significant related party transaction or had exceptional year of operation. The reasons were not considered by the AO and he rejected the submission in a summary manner. The Ld. Counsel of the Assessee's contention that selection of these companies by the AO amounts to Cherry Picking and hence not justified caries considerable cogency." Emphasis supplied iii) (ITA No. 4620/ Del/ 2011) DCIT vs. Panasonic AVC Networks India Co Ltd. "In our considered view also, there cannot be a cherry picking for deciding parameters of rejection of a comparable, and the parameters have to be broad enough of being general application. In the scheme of things envisaged under the TNMM, it is inevitable that there will be some differences between the comparables and the tested party but the impact of these differences is substantially mitigated by the averaging. If a comparable is being sought to be rejected on the ground of its differences vis-à-vis the texted party, similar criteria must be adopted for deciding suitability of other comparables as well. It cannot be open to any judicial authority to reject a comparable on the ground that the comparable has significant differences vis-à-vis the tested party, unless the differences are broad enough of general application, are such as materially affecting the profitability, as not being capable of reasonably accurate adjustments to eliminate the impact of such differences, and as are also not found in other comparables. All the comparables must face the same test on which comparability of a particular comparable is being sought to be rejected." iv) (ΙΤΑ ΝΟ. 3800, 3811/Ahd/2007) Daniel Measurement & Control (1) Pvt. Ltd. vs. ACIT "The AO's action to select only favourable instances and ignore rest of the instances was not justified. Even a question has been raised to explain the basis of the discrimination. The Appellant has, on the other hand, informed that the comparable instances have similar nature of business transaction and the comparison of those cases was suitable to the function of the Appellant. We have noted that except ignoring some of the comparable instances, the AO has not pin-pointed any defect in respect of the profit margin disclosed by the Appellant. This type of pick and choose method of the AO cannot be approved. The exclusion of certain companies was therefore uncalled for. In the absence of any contrary material in possession of the AO, there was no reason to reject the Appellant's comparable instances, hence according to us, both AO & CIT(A) have gone wrong in arriving at a higher margin profit." 10.5 Based on above, Avantel Ltd., engaged in array of Satellite Communication, Embedded systems, Signal Processing and Software development which is totally different functions, from the assessee company engaged in manufacturing of telecommunication equipments. Hence, it is prayed Avantel Ltd. be rejected as a valid comparable.”

4.5 Thus, considering the entire aspect of the matter Ld. AR prays for setting aside of the issue to the file of the TPO to consider the same on the basis of the data already provided to the TPO and pass order accordingly.

4.6. Having regard to the facts of the matter and further that the Ld. DR has not raised serious objection to such prayer made by the Ld. AR and further also considering the fact that the details have now been available with the assessee with respect to financial data of all the comparables for F.Y. 2020-21, therefore, we set aside the issue to the file of the Ld. AO/TPO to consider the same and pass the order accordingly.

Regarding inclusion/ exclusion of the comparables the claim of the assessee is that tree comparable companies i.e. Cygnus Micro Systems Pvt. Ltd.; Fibcom India Ltd.; and V Link Systems Pvt. Ltd., we find that the Ld. AO/TPO has not included the same for the reason that financial data of these comparables were not available in F.Y. 2020-21. However, since the financial data of these companies have now been available, therefore, we direct the Ld. AO/TPO to include these comparables in the TP study and decide the issue accordingly.

6. With respect to Exicom Telesystems Ltd. (Telecom Segment), the Ld. CIT(DR) fairly admitted that this comparable was directed to included by the Ld. DRP, however, the Ld. TPO/AO has inadvertently excluded the same, therefore, we direct to include it in the TP study.

“17.1 In this regard it is submitted that the appellant had availed an Unsecured External Commercial Borrowing (ECB's) from its AE Fiberhome Telecommunication Technologies Co Ltd, China in USD. The loan carries an interest rate at LIBOR + 3% on the last day of FY i.e. effective rate of 3.077% and interest for the relevant AY amounted to Rs. 89,93,130/-. The appellant had also availed another Unsecured ECB from same AE. The loan carries a fixed interest rate at LIBOR + 3% on the date of agreement i.e. effective rate of 3.55714% and interest paid amounted to Rs. 28,88,400/-. It is further submitted that the appellant had already duly benchmarked the transaction under consideration. Details of benchmarking have been provided as follows: In TP study, a search process has been undertaken in public domain to identify External commercial borrowings ('ECB's'). In order to identify comparable ECBs, details of corporate debt issuances have been extracted from the following data sources: 2.1. Refinitiv LPC LoanConnector Loan Pricing Corporation ("LPC") provides information on bank loans since 1985. DealScan is LPC's historical database of deal terms and conditions on loans, high yield bonds and private placements worldwide. This information is delivered via LoanConnector, an internet-based platform. DealScan database, which is part of the Loan Connector product, provides information on the global commercial loan market. DealScan provides users with access to LPC's database of detailed terms and conditions of loans and bond transactions. The database provides information about current deals in the market and offers a historical perspective on deal pricing or market trends. The search yielded 22,818 results. 2.2. Reserve Bank of India ("RBI") Monthly data of ECB's The RBI publishes a list of ECBs, Foreign Currency Convertible Borrowings (FCCBs) and Rupee Denominated Bonds (RDBs) issued on a monthly basis. The list of ECBS, FCCBs and RDBs by Indian companies was downloaded from the website of the RBI for FY 2019- 20, i.e. April 2019 to March 2020. The search yielded 987 results. 2.3. Previous year search matrix In addition to the above sources, borrowings analysed till last year (FY 2018-19) and accepted as comparable issuances were re- examined to identify comparable for FY 2019-20. This resulted in an addition of 156 issuances. Combining these transactions with that of the transactions identified from the sources above resulted in 23,961 issuances. 2.4. Search matrix for year of the issuance of ECB (FY 2014-15 and FY 2015-16) In addition to the above sources, borrowings analysed for the year FY 2014-15 and FY 2015-16 and accepted as comparable issuances were re-examined to identify comparable for FY 2014-15 and FY 2015-16. 17.2 The learned Transfer Pricing Officer overlooked the Arm's Length Price (ALP) computation presented by the appellant for External Commercial Borrowings (ECB) interest in the Transfer Pricing Report. Rather than conducting a thorough assessment of ALP in TP report, the learned TPO seemingly prepared this order by copying ALP computations from previous assessment years and incorporating them into the current year's order though the search process in TP report for subject assessment year is different. This action is factually incorrect, purely mechanical and constitutes a flawed interpretation of the law. 17.3 The appellant asserts that the ALP computation detailed in the Transfer Pricing Report accurately reflects the economic realities of the current assessment year. There are specific discrepancies between the TPO's methodology and the appellant's approach, creating evident inaccuracies in the TPO's order. With Reference to Point 10.1 on Pages 28-29 of TPO order dated 17.12.2023 (pages 265266 of Paper Book), which was later upheld by the learned DRP consequently, we bring following to the attention of the Hon'ble Tribunal demonstrating the irregularities in the TPO's overlooked ALP computation in the TP Report and prepared the TPO order by copying past assessment year data. TPO Remark Assessee Contention Remark You have considered In TP study, a search process Since, the search has been RBI's ceiling rate as the undertaken has been public conducted on widely appropriate domain to identify ECB's on popular Loan Connector comparable, which is following databases- database using various not acceptable Refinitiv LPC Loan Connector filters which have been Reserve Bank of India ("RBI") discussed in detail in the TP Monthly data of ECB's ALP report. ALP computed Search matrix for ECB FY in TP report should be 2019-20 accepted. There is no need Search matrix for year of the for computation of again. issuance of ECB (FY 2014-15 and FY 2015-16) Further, benchmarking As said above, in TP study, a using SBI FCNB is not search process has been relatable. undertaken in public domain to identify ECB's.

17.4 Therefore, it is submitted that the transactions under consideration have been duly benchmarked by the appellant in the TP Study and thus outright rejection of the same without providing any cogent reasons is not only erroneous in facts of the case of the appellant but also wholly bad in law and untenable.” 9. It is the case of the assessee that the TPO selected the following comparables:

S. No. Company Name Whether Date of Issue Rate passed date filter 1 Larsen & Toubro Ltd Yes 21.10.2014 0.6750% 2 Indian Synthetic Rubber Yes 23.02.2016 1.5500% Pvt. Ltd. 3 Larsen & Toubro Ltd Yes 25.11.2013 2.5678% 4 Bharat Forge Ltd. Yes 07.10.2013 2.7270% 5 Larsen & Toubro Ltd No 04.08.2016 2.7931% 6 Videocon Industries Ltd. No 30.12.2016 2.8000% 9.1 According to the assessee - i. TPO must apply this filter to compare the financial health of borrower. A person/company having good financial track/health records will get lower interest rate as compared to a person/company not having good financial track/health records. ii. For an example a person/company having income more than 1 crore per month and good savings will pay lower interest rates as compared to a person/company having nil or minimum income without any financial track record will get much higher interest rates. iii. Hence comparability of unsecured ECB should also be done with financial track/health records of borrower. iv. Based on this filter, here is the comparability summary based on net worth of the companies- S. Company Name Net Worth Fiberhome Difference in Net Comparable No. 31.03.14 Net Worth Worth 31.03.14 1 Larsen & 3,36,61,83,00,000 67,75,645 3,36,61,15,24,355 Not Toubro Ltd. comparable 2 Bharat Forge 29,93,30,80,000 67,75,645 26,92,63,04,355 Not Ltd. comparable 3 Videocon 1,03,62,55,00,000 67,75,645 1,03,61,87,24,355 Not Industries Ltd. comparable 4 Indian Synthetic 3,09,46,00,000 57,75,645 3,08,78,24,355 Not Rubber Pvt. Ltd. comparable 9.2 In fact it was further brought to our notice that for A.Y. 2015-16 & 2016-17 no adjustment was made on the identical loan taken by the assessee.

9.3 In this case new comparables namely Bloomberg database – 10.1. The appellant used Refinitiv LPC Loan Connector whereas TPO resorted Bloomberg database without objecting appellant's database. (Grounds 6 to 6.3)

Particular TPO remark in TPO Assessee remark in TP Status in TPO order Report Order Database Bloomberg database Refinitiv LPC Loan No objection raised by Id. ΤΡΟ. Connector Assessee also tested the Ld. TPO ALP using RBI's published overlooked the monthly details of ECBs, search process. FCCBs, and RDBs, for identification the of comparable ECBS Filters No objection on All appropriate filters are Ld. TPO raised no filters used in TP used to compute the ALP objections on filters report used in TP report to compute ALP. Comparable No objection on All appropriate selected Ld. TPO raised no Companies comparable companies. objections on filters companies selected used in TP report to in TP report compute ALP. Conclusion Ld. TPO doesn't not raise any objection on database used, filters applied or comparable companies selected for ALP. Therefore, ALP computed in transfer should be accepted as ALP 10.2 The Ld. AO/TPO made the addition on account of interest on ECB of Rs. 19,95,526/-. The Ld. AR brought to our notice that these borrowing were taken in F.Y. 2014-15 & 2015-16 whereas the interest payments were not doubted by the Revenue whereas in the year under appeal it has been doubted and adjustment is made. In view of these facts, by following the principle of consistency as has been held by the Hon’ble Supreme Court in the case of Radha saomi Satsang Bagh v.

CIT 377 AIR (SC) 1992, we hold that the Ld. AO cannot deviate from the principle of consistency which is settled position. Accordingly, we direct the Ld. AO to delete the adjustment made on this score.

Order pronounced in open court on 30.01.2026.