Loading judgment…
Facts
Inabensa Bharat P. Ltd. appealed against the assessment order for A.Y. 2014-15, which incorporated transfer pricing adjustments made by the TPO and partially upheld by the DRP. The TPO had rejected the assessee's TNMM and made adjustments related to foreign exchange fluctuation gains and engineering service segment. The assessee repeatedly failed to appear and pursue the appeal, leading the Tribunal to hear the case ex parte based on available records.
Held
The Tribunal noted that the assessee failed to furnish any material to controvert the findings of the Assessing Officer or the Transfer Pricing Officer. Consequently, the impugned assessment order was upheld, and the appeal of the assessee was dismissed.
Key Issues
Whether the assessment order and DRP directions regarding adjustment on account of foreign exchange fluctuation gains and transfer pricing adjustments in the engineering services segment were justified.
Sections Cited
143(3), 144C(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “I”, DELHI
ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the assessment order dated 26.10.2018 passed u/s 143(3) r.w.s 144C(6) of the Income Tax Act 1961 (hereinafter referred to as ‘the Act’), for assessment year 2014-15.
This appeal was filed by the assessee in December 2018. Initially the assessee was represented by Shri Ved Jain, Advocate. The assessee had filed an application for early hearing of appeal. The same was allowed by the Tribunal (A.Y.2014-15) vide order dated 13.02.2019 and the appeal was listed for hearing on 07.03.2019. On the said date the appeal was adjourned to 01.05.2019 at the request of ld. DR. Thereafter on 01.05.2019 the assessee sought adjournment to file paper book. The assessee again on 17.09.2019 sought adjournment. The Bench vacated the benefit of early hearing allowed to the assessee. The appeal was thereafter adjourned to 14.11.2019. On the said date bench did not function and the appeal was adjourned to 22.01.2020. On 22.01.2020 the appeal was adjourned to 12.03.2020 at the written request of assessee’s counsel. On 12.03.2020 again the appeal was adjourned to 11.05.2020 at the request of counsel for the assessee. Thereafter, in remaining part of year 2020 the appeal could not be heard as the Bench did not function on account of Covid-19 pandemic. The hearing of appeal resumed on 23.02.2021, on the said date again the appeal was adjourned at the request of assessee’s counsel. Thereafter, the appeal was repeatedly adjourned at the written request of counsel for the assessee on following dates 22.04.2021, 23.08.2021, 26.10.2021, 03.01.2022, 03.03.2022, 10.05.2022 and 02.08.2022. Thenceforth, none appeared to represent assessee. Repeated notices were sent to the assessee as per the zimini orders dated 10.11.2022, 28.02.2023, 11.05.2023, 17.08.2023, 23.11.2023 and 22.02.2024. The notices were sent to the assessee on various dates through RPAD. The notices were received back un- served from the postal authorities with remarks, closed since long/left. The notices were sent to the assessee on the address furnished in Form no. 36. The assesee has not furnished any revised Form No. 36 intimating its current/new address. The conduct of the assessee shows that the assessee is not interested in pursuing the appeal. Therefore, this appeal is taken up for hearing with the assistance of ld. DR and on the basis of documents already on record.
(A.Y.2014-15) 3. Shri Rajesh Kumar, representing the Department vehemently defended the impugned assessment order and the order of TPO.
The assessee in appeal has primarily raised two grounds assailing the assessment order and the directions of the DRP i.e. (i) Adjustment on account of foreign exchange fluctuation gains; and (ii) Transfer Pricing adjustment in respect of engineering services segment. The assessee is a subsidiary of Abengoa S.A engaged in providing engineering & construction services for electrical, mechanical and instrumental infrastructure in the sectors of energy, industry, transport, service, communication etc. During the period relevant to assessment year under appeal, the assessee entered into various international transactions. To benchmark the Arm’s Length Price (ALP) of the transactions, the assessee applied Transactional Net Margin Method (TNMM) as the most appropriate method. The TPO vide order dated 26.10.2017 rejected TNMM in trading segment and applied RPM as most appropriate method. In engineering services segment the TPO rejected the segment accounts and allocated indirect expenses of trading segment to engineering segment and made following adjustments: Segment Amount of SI.No adjustment in INR 1 Trading Segment 504,518,505 2 Engineering service 95,989,974 segment Total 600,508,479