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Income Tax Appellate Tribunal, DELHI BENCH: ‘DB’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH
Assessee by Sh. Salil Kapoor, Adv. Sh. Anil Chachra, Adv. Sh. Utkarsa Gupta, Adv. Ms. Ananya Kapoor, Adv. Sh. Tarun Chanana, Adv. Sh. Shivam Yadav, Adv. Department by Sh. Amar Pal Singh, Sr. DR Date of hearing 21.03.2025 Date of pronouncement 02.04.2025 ORDER
PER SATBEER SINGH GODARA, JM
The instant batch of three cases pertains to the single assessee herein, M/s. Delta Power Solutions India Pvt. Ltd. These Revenue’s twin appeals and 3/DDN/2024 (duplicate file) with assessee’s cross-objection in the former case C.O. No. 38/Del/2019, arise against the CIT(A), Haldwani’s order dated 23.05.2018 passed in case no. 10216/CIT(A)/HLD/2016-17, involving proceedings under section 143(3)/92C(4) of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’), respectively.
Heard both the parties. Case files perused. The Revenue’s main appeal raises the following grounds: 1. Whether the Ld. CIT(A) was justified in rejecting the comparable companies selected by the Ld. TPO on the basis of functional differences ignoring the findings of the Ld. TPO. 2 | P a g e ; 3/DDN/2024 & C.O. No.38/Del/2019
2. Whether the Ld. CIT(A) was justified in rejecting the comparable companies having relatively higher margins.
3. Whether the Ld. CIT(A) was justified in rejecting M/s Crompton Greaves Ltd. As a comparable on the basis of existence of an event of amalgamation which cannot be verified, ignoring the findings of this office.
4. Whether the Ld. CIT(A) was justified in directing to include M/s Nutech Engineers and Power Systems Ltd. as a comparable irrespective of the fact that the same company was considered to be non-comparable by both assessee and Ld. TPO during the TP proceedings. 5. Whether the Ld. CIT(A) was justified in giving contradictory directions by upheld a company as comparable and rejecting another as comparable on the basis of similar products, in spite of the facts that these companies have similar products. 6. That the order of the Ld. CIT(A), Haldwani is against the spirit of legislature and the order of the AO is liable to be restore. 7. That the appellant craves, leave to add, alter, clarify, amend or withdraw any grounds of appeal
as and when the occasion demands.
3. It is at this stage that the learned counsel representing assessee’s status at the bar that there arises the first and foremost issue of inclusion of M/s. Crompton Greaves Ltd. as a comparable whilst determining the arm’s length price “ALP” of the respondent/taxpayer’s international transactions with its overseas associates enterprises involving manufacturing segment. We are taken to page 57, para 6.2.7 of the lower appellate discussion rejecting M/s. Crompton Greaves Ltd. from the array of valid comparables since having undergone an extraordinary event of amalgamation of a subsidiary, in its books of account in the 3 | P a g e ; 3/DDN/2024 & C.O. No.38/Del/2019 relevant previous year. We wish to make it clear that we afforded adequate opportunity to the department to rebut the CIT(A)’s foregoing clinching findings going to the root of the matter. There is no rebuttal thereto coming from the department side to this effect.
That being the case and in light of the assessee’s foregoing limited prayer, we reject the Revenue’s third substantive ground in its instant former appeal seeking to include M/s. Crompton Greaves Ltd. in the array of comparables whilst degerming ALP of the assessee’s international transactions and leave it upon open for the learned Transfer Pricing Officer (TPO) to finalize his consequential computation in very terms, as per law. All other grounds raised at the Revenue’s behest in its instant appeal are accepted for statistical purposes in very terms. Ordered accordingly. This Revenue’s appeal is partly allowed for statistical purposes.
5. The Revenue’s latter appeal 3/DDN/2024 is dismissed as a “duplicate” file subject to all just exceptions. Learned counsel representing assessee does not wish to press for C.O. No. 38/Del/2019 in above terms. Rejected accordingly.