M/S TAKATA INDIA PVT. LTD.,,NEW DELHI vs. DCIT, NEW DELHI
Income Tax Appellate Tribunal, DELHI BENCH ‘H’, DELHI
Before: SHRI PRAKASH CHAND YADAV & MANISH AGARWALAssessment Year: 2011-12
PER PRAKASH CHAND YADAV, JUDICIAL MEMBER:
The present appeal of the assessee is arising from the order of the Assessing Officer dated 27.10.2015 and relates to assessment year 2011-12
Brief background of the case are that the present appeal was earlier heard and decided ex-party by the Co-ordinate Bench on 17.9.2018. Thereafter, the assessee has filed Miscellaneous application registered as ITA No.6835/Del2015 Assessment Year: 2011-12
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No.761/Del/2018 and the matter was recalled by the Co-ordinate Bench on 4.9.2020. Since then, this matter is pending here. It is pertinent to note that this matter has already been adjourned 11 times on various occasions, most of the time at the request of ld AR of the assessee and the appeal was last fixed for hearing on 31.7.2015. It is next observed that on 31.12.2024, the predecessor Bench has already granted last and final opportunity to the assessee and revenue, on that day one Mr. Ashwani Nalhe AR had appeared on behalf of the assessee. Despite final opportunity dated 31.12.2024, the matter has been adjourned several times again at the request of the assessee. So far as the contention of the counsel for the assessee that certain complex issues of transfer pricing are involved in this case, we do not find any force in the arguments of ld. counsel for the assessee as evident from the fact that till date neither any paper book either of the documents to be relied on nor any case law compilation has been filed by the assessee.
Today, when this matter was called up for hearing, one A.R. of the assessee appeared virtually and has sought adjournment once again. However, the Bench clerk pointed out that there is no power of attorney on record of the ITAT authorizing this present A.R. who has appeared
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Assessment Year: 2011-12
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virtually. The Bench asked the ld. counsel for the assessee about his power of attorney to which he has informed that he will file the power of attorney in the course of the day. So far as the request of ld. counsel for the assessee vis-à-vis grant of adjournment is concerned, same is declined observing the long pendency of the matter. The Bench has directed the ld. counsel for the assessee (without P.O.A) that he can file the written submission on behalf of the assessee along with power of attorney. With these observations, the assessee has been granted 10 days’ time.
However, till date, i.e. on 11.8.2025, neither any power of attorney nor any written submission has been received from the side of the assessee.
Therefore, we are deciding this appeal on the basis of materials available on record.
Brief facts of the case as coming out from the orders of lower authorities that the assessee is a company engaged in the business of manufacturing/assembling of automotive airbag modules, steering wheels and seat belt. During the year under consideration, it has filed its return of income declaring loss of Rs.24.47 crores. Thereafter, the case of the assesse was selected for scrutiny. Since the assessee company had entered into an international transaction with its associated enterprises (A.E), the matter was referred to the Transfer Pricing Officer (Transfer
ITA No.6835/Del2015
Assessment Year: 2011-12
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Pricing Officer) after taking approval from the concerned authority for determining the Arm’s Length Price (ALP) of international transaction undertaken by the assessee. The Transfer Pricing Officer vide its order dated 29.1.2015 conducted the T.P.Study and suggested an adjustment of Rs.13,81,10,475/-. After the arrival of Transfer Pricing order, the Assessing Officer passed the draft assessment order vide order dated
16.3.2015 and made an addition of Rs.13.81 crores, as suggested by the Transfer Pricing Officer. Besides this, the Assessing Officer has also made certain other additions such as disallowance of prior period expenses to the tune of Rs.10,14,075/-, as well as disallowance of employee’s contribution to PF, paid beyond the due date specified in the relevant statute.
Aggrieved with the order of the Assessing Officer, the assessee filed its objection before the Ld.DRP and the Ld.DRP vide his order dated 25.9.2015 directed the Transfer Pricing Officer to consider certain arguments of the assessee. After the direction of ld Ld.DRP, the Transfer Pricing Officer once again computed the Arm’s Length Price and revised the adjustment to the tune of Rs.11,89,11,663/-. Accordingly, the Assessing Officer passed the final assessment order, which is impugned before us.
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Assessment Year: 2011-12
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6. It is also pertinent to note that in this case, the name of the assessee company has been changed to M/s. Joyson Anand Abhishek
Safety Systems Pvt Ltd., due the order of NCLT dated 5.5.2020. The assessee has also filed revised Form No.36B vide its letter dated
25.11.2020. 7. The assessee has raised following grounds of appeal:
“1.That the ld Ld. AO/Transfer Pricing Officer (Transfer Pricing
Officer) /Ld.DRP have erred in law and in facts of the present case in making transfer pricing adjustment of INR 11,89,11,663 to the income reported by the appellant in its return of income.
That the ld Ld. AO/Transfer Pricing Officer (Transfer Pricing Officer) /Ld.DRP have erred in law in rejecting the transfer pricing methodology adopted by the appellant and adopting a different mthod for computing arm’s length price of international transactions entered into by the appellant.
That the ld Ld. AO/Transfer Pricing Officer (Transfer Pricing Officer) /Ld.DRP have erred in law and in facts and circumstances of the present case in rejecting most appropriate method, as selected by the appellant for benchmarking its international transactions and in applying transactional net margin method as most appropriate method.
Without prejudice to the above that while applying TNMM as most appropriate method
That the ld Ld. AO/Transfer Pricing Officer (Transfer Pricing Officer) /Ld.DRP have erred in facts and in law by not allowing adjustment for the difference in the import duty and other related costs of the appellant vis-a-vis the selected comparable companies.
That the ld Ld. AO/Transfer Pricing Officer (Transfer Pricing Officer) /Ld.DRP have erred in facts and law by not allowing
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adjustment for less capacity utilization, as claimed by the appellant..
That the ld Ld. AO/Transfer Pricing Officer (Transfer Pricing Officer) ld.DRP have erred in adopting a different basis as compared to previous years, without providing any justification.
That the ld Ld. AO/Transfer Pricing Officer (Transfer Pricing Officer) /Ld.DRP have erred in law and in facts and circumstances of the present case by disallowing the use of working capital adjustment to the appellant.
That the ld Ld. AO/Transfer Pricing Officer (Transfer Pricing Officer) /Ld.DRP have erred in law and in facts and circumstances of the present case by not providing adjustment for market penetration strategy of Takata India.
That the ld Ld. AO/Transfer Pricing Officer (Transfer Pricing Officer) /Ld.DRP have erred in law and in facts and circumstances of the present case by applying inappropriate filters.
That the ld Ld. AO/Transfer Pricing Officer/Ld.DRP have erred in determining Arm’s length price by reference to comparables without proper justification..
That the ld Ld. AO/Transfer Pricing Officer (Transfer Pricing Officer) /Ld.DRP have erred in law and in facts and circumstances of the present assessee in disregarding use of multiple year financial data as used by the appellant in its transfer pricing documentation and using single year financial data.
12, That the ld Ld. AO/Transfer Pricing Officer (Transfer Pricing
Officer) /Ld.DRP have erred in law and in facts and circumstances of the present case in not proving the benefit of deduction of +5%
as per proviso to section 92C(2) of the Act.”
Ground No.1,2 & 3 are related to the applicability of most appropriate method vis-à-vis computation of Arm’s Length Price(ALP) of international transaction.
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9. It is the contention of the assessee that for bench marking the international transaction, the assessee has applied TNMM is the most appropriate method for determining the Arm’s Length Price. However,
Ld.DRP as well as Transfer Pricing Officer applied CUP method as most appropriate method. We observe that the Ld.DRP has not at all dealt with this issue in judicious manner. The Ld.DRP has not even discussed the contentions raised by the assessee as well as the arguments put-forth by the assessee while delivering this order. Therefore, we hereby restore this issue to the file of the Ld.DRP for deciding the issue afresh in accordance with law.
In rest of the grounds i.e. 4 to 10, the assessee has challenged the action of the Transfer Pricing Officer in not applying filters in selecting comparables while computing Arm’s Length Price. In these grounds, the assesse has challenged various adjustments which the assessee wanted to be considered by the Transfer Pricing Officer for selecting the comparables. In the nutshell, all the arguments of the assessee that Transfer Pricing Officer has not failed to apply FAR test while selecting the comparables.
Ld CIT DR relied on the orders of authorities below.
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12. After considering the arguments of ld CIT DR and perusing the papers before us, especially the grounds of appeal raised by the assessee, we are of the view that this issue also requires fresh consideration at the of the level of Transfer Pricing Officer. We order accordingly.
It is also directed to the Transfer Pricing Officer that he will provide meaningful opportunity to the assessee and then decide the issue i.e. selection of comparables after applying FAR basis as mentioned in the Income Tax Rules. The assessee is also at liberty to place all the supporting documents before the Transfer Pricing Officer, which is relevant for selection of comparables for determination of Arm’s Length Price. With these observations, we restore this issue to the file of the Transfer Pricing Officer.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in court on 28th day of August, 2025 (Manish Agarwal)
Judicial Member
Delhi
Dated, 28th August, 2025
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Assessment Year: 2011-12
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B.K.Parida, Sr.PS(OS)
Copy to:
The Applicant: Takata India Pvt Ltd., (now Joyson Anand Abhishek Safety Systems Pvt Ltd.,) Plot No.20, Sector-5, IMT Manesar, Gurugram (Haryana)-122050 2. The respondent: DCIT, Circle 25(1), New Delhi 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Delhi 6. Guard file
By order
Asst.