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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI ARUN KUMAR GARODIA & SHRI PAVAN KUMAR GADALE
O R D E R
Per Shri A.K. Garodia, Accountant Member
This appeal is filed by the assessee and the same is directed against the assessment order dated 16.12.2016 passed by the AO u/s. 143(3) r.w.s. 144C (13) of IT Act, 1961 for Assessment Year 2012-13 as per the directions of DRP.
The grounds raised
by the assessee are as under. “TP issues:
1. The AO/TPO erred in passing the order without considering the objections raised by the Appellant vide its reply dated 19.01.2016 to the show cause notice dated 08.12.2015.
2. The AO/TPO's observation that the Appellant searched only one data base viz., Capitaline and not Prowess data base is not valid in law.
3. The TPO erred in arriving at PLI by taking comparables whose functions are not similar to that of the Appellant.
4. The TPO erred in choosing comparables whose turnover was beyond the limits laid down by the Hon'ble Tribunal viz., 1/10thto 10 IT(TP)A No. 419/Bang/2017 Page 2 of 3 times of the turnover of the tested party.
5. The TPO erred in including companies which had related party transactions of above 25% of sales as comparables to arrive at PLI of the Appellant.
The TPO erred in including companies that have been making losses persistently as comparables.
The TPO erred in applying industrial sales filter when he selected companies with industrial sales above 25% of total turnover.
The TPO erred in not providing adjustment for under-utilization of capacity.
The TPO erred in not providing adjustment due to under-utilization of capacity which resulted from gestation/initial period of the Appellant.
The TPO erred in not granting risk adjustment.
The TPO erred in not accepting the pricing study made by the Appellant. Non-TP issues: 12. The AO erred in not allowing depreciation as claimed towards building and machinery.
The ex-parte order passed by the DRP/AO without providing fair opportunity to the Appellant is bad in law and requires to be set aside.
Without prejudice, the impugned additions as made are arbitrary and ought to be reduced substantially.
For these and such other grounds that may be urged at the time of hearing, the Appellant prays that the appeal may be allowed.”
At the very outset, it was submitted by ld. AR of assessee that the order passed by the DRP on 30.11.2016 is ex-parte qua the assessee. He further pointed out that only one date of hearing was fixed on 21.11.2016 and the order was passed on 30.11.2016. He submitted that under these facts, the matter may be restored back to the file of DRP for fresh decision after providing adequate opportunity of being heard to the assessee. The ld. DR of revenue submitted that it was noted by DRP in paras 1 and 2 of its directions that two dates were fixed for hearing i.e. on 20.10.2016 and 21.11.2016 but on none of these dates, anybody appeared before DRP on IT(TP)A No. 419/Bang/2017 Page 3 of 3 behalf of the assessee and even no request was made for adjournment. He submitted that under these facts, the order of DRP should be confirmed.
We have considered the rival submissions. We feel that in the interest of justice, the DRP should have provided some more opportunities of being heard to the assessee and only these two opportunities does not amount to providing sufficient opportunities and hence, we set aside the assessment order passed by the AO as per these directions of DRP and restore the matter back to the file of DRP for fresh decision after providing reasonable opportunity of being heard to both sides. In view of this decision, no adjudication is called for regarding the merit of the case at the present stage.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on the date of hearing on conclusion of the hearing.