“tested party”

Transfer PricingSection 92CSection 92C615 judgments

The decision most relied on for tested party is ITO v. E Value Serve.com (75 Taxmann.com 195), cited in 60 judgments on BharatTax.

Leading authorities on tested party

ITO v. E Value Serve.com

75 Taxmann.com 195 · 2016 · Reported

citing judgments

In transfer pricing analysis, demanding daily balances for working capital adjustments is impractical and improper; adjustments should be based on opening and closing working capital. Transfer pricing inherently involves estimation to ensure comparability.

Ranbaxy Laboratories Ltd. v. ACIT

68 Taxmann.com 322 · 2016 · High Court

citing judgments

When benchmarking export transactions, the Associated Enterprise (AE) can be considered the tested party if it possesses the least complex functional analysis. The Assessing Officer's acceptance of a methodology in prior years can also support its use.

Capital IQ Information Systems India Pvt. Ltd. v. DCIT

32 Taxmann.com 21 · 2013 · ITAT

citing judgments

A change in depreciation policy impacts an entity's profitability, which is a key factor in assessing its suitability as a comparable company for transfer pricing analysis.

Skoda Auto India (P) Ltd. v. ACIT, Aurangabad

30 SOT 319 · 2009 · ITAT

citing judgments

The Tribunal may allow adjustments for differences between the tested party and comparable companies to eliminate material differences, provided accurate and credible evidence is furnished.

Development Consultants Pvt. Ltd. v. DCIT

115 TTJ 577 · 2008 · ITAT

citing judgments

The Arm's Length Price (ALP) must be determined on a transaction-by-transaction basis, and transactions should only be evaluated together if they are so closely linked or continuous that they cannot be adequately assessed separately. The 'tested party' for determining ALP should be the least complex entity.

Pr. CIT v. Aptara Technology (P.) Ltd.

92 Taxmann.com 240 · 2018 · High Court

citing judgments

A comparable company is not suitable if it has a significantly different business model, such as substantially higher outsourcing expenses as a percentage of operating costs, indicating a deviation from the tested party's operations.

Ranbaxy Laboratories Ltd. v. Additional Commissioner of Income-tax

110 ITD 428 · 2008 · ITAT

citing judgments

The tested party in a transfer pricing analysis should be the entity for which reliable comparable data is readily available and requires the fewest adjustments. This generally means selecting the party with the less complex functional analysis.

Smt. Raj Rani Devi Ramna v. CIT

201 ITR 1032 · 1993 · High Court

citing judgments

The transfer of property does not necessarily occur upon registration; the true test is the intention of the parties and whether there are any conditions precedent like payment of consideration or delivery of the deed.

Judgments citing tested party

M/S Tokai Rika Minda India Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Cicle-7(1)(1), Bangalore

In the result, the assessee’s appeal is partly allowed for statistical purposes

ITA 1513/BANG/2017[2013-14]Status: DisposedITAT Bangalore29 Jun 2022AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri K.R. Vasudevan, A.RFor Respondent: Dr. Manjunath Karkihalli, D.R

Section 143(3)Section 92CSection 92C(2)

always taken into account in pricing a product. If the individual elements of cost were to be separately adjusted for differences between the tested party and the comparables, then the profit margin of all the companies would become uniform. e. The assessee company ought to have considered the customs duty ... held as under:- 10. “On the issue of depreciation adjustment, the assessee has submitted that if the rates of depreciation are different between the tested party and the comparable companies, an adjustment has to be made for the same in the comparability analysis. In this regard, the assessee has relied

M/S Greatship (India) Ltd., Mumbai vs. Asst CIT Range 5 (1)(1), Mumbai

In the result, appeal filed by the Appellant is allowed

ITA 7001/MUM/2019[2015-16]Status: DisposedITAT Mumbai27 Jun 2022AY 2015-16

For Appellant: Shri M M GolvalaFor Respondent: Dr. Yogesh Kamat

Section 133(6)Section 143(3)Section 144C(13)Section 144C(5)Section 14ASection 92BSection 92C

year i.e F.Y 2010-11 and was disbursed in parts in the said preceding year and the current financial year. Considering itself as the tested party, the assessee had benchmarked the interest charged on the loans advanced to its AE, viz. GGHL on the basis of the arithmetic mean

M/S. Walvoil Fluid Power (India) Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 7(1)(2), Bengaluru

In the result, the appeal by the assessee is partly allowed

ITA 1839/BANG/2019[2007-08]Status: DisposedITAT Bangalore27 Jun 2022AY 2007-08

Bench: Smt. Beena Pillai & Ms. Padmavathy S

For Appellant: Shri R.E. Balasubramaniyan, CAFor Respondent: Smt. Susan Dolores George, CIT(OSD)(DR)

Section 143(3)Section 154Section 92C

Rule 10B itself categorically provides that an adjustment ought to be provided for any differences in the economic factors and circumstances under which the tested party and the comparables are operating. In the instant case, the assessee is being compared with companies which have been in the market for decades ... relation to the international transaction [or the specified domestic transaction] ;" 20. Under TNMM, the net profit of a controlled transaction of an associated enterprise (tested party) is determined and this net profit is then compared to the net profit realized by comparable uncontrolled transactions of independent enterprises. As opposed

M/S. Citrix R & D India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 2(1)(1), Bangalore

In the result the appeal filed by the assessee is allowed for statistical purposes

ITA 2428/BANG/2019[2015-16]Status: DisposedITAT Bangalore15 Jun 2022AY 2015-16

Bench: Shri Chandra Poojari & Shri George George K.

For Appellant: Shri Sumeet Khurana, A.RFor Respondent: Ms. Neera Malhotra, D.R

types of inventory) 16. Making a working capital adjustment is an attempt to adjust for the differences in time value of money between the tested party and potential comparables, with an assumption that the difference should be reflected in profits. The underlying reasoning is that: • A company will need funding ... factors have to be kept in mind (i) The point in time at which the Receivables, Inventory and Payables should be compared between the tested party and the comparables, whether it should be the figures of receivables, inventory and payable at the year end or beginning of the year

Ametek Instruments India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-1(1)(1), Bengaluru

In the result, the appeal filed by the assessee is partly allowed

ITA 432/BANG/2021[2016-17]Status: DisposedITAT Bangalore13 Jun 2022AY 2016-17

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.432/Bang/2021 : Asst.Year 2016-2017 M/S. Ametek Instruments India The Assistant Commissioner Private Limited Of Income-Tax, Circle 1(1)(1) V. Benguluru. Plot No.1, Epip Industrial Area, Divyashree Nr Enclave, 4Th Floor Block A, Whitefield Bengaluru – 560 066. Pan : Aahca2869B. (Appellant) (Respondent)

For Appellant: Sri.K.R.Vasudevan, AdvocateFor Respondent: Dr.Manjunath Karkihalli, CIT -DR

Section 143(2)Section 143(3)

powers of enhancement held that no adjustment should be made to the profit margins on account of working capital differences between the tested party and the comparable companies for the following reasons: (i) The daily working capital levels of the tested party and the comparables was the only reliable basis ... because it is not an exact science. One has to see that reasonable adjustment is being made so as to bring both comparable and test party on same footing. Therefore there is little merit in CIT (A)'s objection on working adjustment based on unavailable daily working capital requirements data

M/S Lenovo (India) Private Limited, Bangalore vs. Income Tax Officer Ward-4(1)(1), Bangalore

ITA 35/BANG/2019[2014-15]Status: DisposedITAT Bangalore13 Jun 2022AY 2014-15

Bench: Shri. George George K & Ms. Padmavathy S

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 271(1)(c)Section 37(1)Section 92C

consonance with Rule 10B(1)(e), which mandates only arriving at the net profit margin by comparing the profits and loss account of the tested party with the comparable. The IT(TP)A No.35/Bang/2019 Page 11 of 21 TNM Method proceeds on the assumption that functions, assets and risk being ... illogical and improper to treat AMP expenses as a separate international transaction, for the simple reason that if the functions performed by the tested parties and the comparables match, with or without adjustments, AMP expenses are duly accounted for. It would be incongruous to accept the comparables and determine

Levi Staruss (India) Private Limited, Bangalore vs. DCIT, Bangalore

In the result, the appeal filed by assessee stands partly allowed as indicated hereinabove

ITA 695/BANG/2016[2011-12]Status: DisposedITAT Bangalore30 May 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 695/Bang/2016 Assessment Year : 2011-12 M/S. Levi Strauss (India) Pvt. Ltd., The Deputy Sjr Cyber, 7Th Floor, Commissioner Of No. 22, Laskar Hosur Road, Income Tax, Adugodi, Circle 4 (1)(1), Bangalore – 560 030. Vs. Bangalore. Pan: Aaacl3092Q Appellant Respondent Assessee By : Shri Nageswar Rao, Advocate : Dr. Manjunath Karkihalli, Revenue By Cit Dr Date Of Hearing : 31-03-2022 Date Of Pronouncement : 30-05-2022 Order Per Beena Pillaipresent Appeal Is Filed By The Assessee Against The Final Assessment Order Dated 28.01.2016 U/S. 143(3) R.W.S. 144C Of The Act By The Ld.Dcit, Circle – 4 (1)(1), Bangalore For Assessment Year 2011-12 On Following Grounds Of Appeal. “Based On The Facts & Circumstances Of The Case & In Law, Levi Strauss (India) Private Limited (Hereinafter Referred To As "Appellant") Respectfully Craves Leave To Prefer An Appeal Against The Order Passed By The Learned Assessing Officer (Hereinafter Referred To As The "Learned Ao") Under Section 143(3) Read With Section 144C Of The Income-Tax Act, 1961("The Act") On The Following Grounds:

For Appellant: Shri Nageswar Rao, Advocate

Section 143(3)Section 144C

level. 4.4 The Ld.AR submitted that RPM is the method that is applied to test the transactions involving distribution functions that is, when the tested party purchases products from a related party and resale the same to independent parties. Therefore RPM is considered as the most appropriate method for computing

M/S. Te Connectivity Services India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal by the assessee is partly allowed for statistical purposes

ITA 300/BANG/2021[2016-17]Status: DisposedITAT Bangalore26 May 2022AY 2016-17

Bench: Shri Chandra Poojari & Smt. Beena Pillaiit(Tp)A No.300/Bang/2021 Assessment Year : 2016-17

For Appellant: Shri Sriram Sheshadri & Ms. Amulya K., CAsFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 143(3)

general in nature and do not require adjudication. 4. Ground Nos.2.3 to 2.4 are as follows:- “2.3 Rejecting the computation of Tested Party margin as undertaken by the Appellant and recomputing the margin considering amortisation of goodwill amounting to INR 91,371,302 as operating in nature. 2.4 Applying ... types of inventory) 16. Making a working capital adjustment is an attempt to adjust for the differences in time value of money between the tested party and potential comparables, with an assumption that the difference should be reflected in profits. The underlying reasoning is that: • A company will need funding

Galax E Solutions India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

In the result, the appeal by the Assessee is partly allowed

ITA 389/BANG/2021[2016-17]Status: DisposedITAT Bangalore25 May 2022AY 2016-17

Bench: Shri N.V. Vasudevan & Ms. S. Padmavathyit(Tp)A No.389/Bang/2021 Assessment Year : 2016-17 Galax E Solutions India Pvt.Ltd. Vs. The Deputy Commissioner Of Income Tax, Unit No.4, 8Th Floor, Innovator Block, Itpl, Circle -3(1)(1), Bangalore, Whitefield Road, Bangalore 560 066. Pan : Aabcg 9007 F Appellant Respondent Appellant By : Shri. C. J. Brito, Ca Respondent By : Shri. Sumeer Singh Meena, Cit, Dr. Date Of Hearing : 23.05.2022 Date Of Pronouncement : 25.05.2022 O R D E R Per N. V. Vasudevan: This Appeal By The Assessee Is Directed Against The Order Dated 26.5.2021 Of The Deputy Commissioner Of Income Tax, Circle 3(1)(1), Bangalore, (Hereinafter Referred To As The Assessing Officer, “Ao” In Short) Passed U/S.143(3) Read With Section 144C(13) Of The Income Tax Act, 1961 (Act) In Relation To Ay 2016-2017. 2. The First Issue To Be Decided In This Appeal Is With Regard To The Correctness Of Determination Of Arm’S Length Price In Respect Of An International Transaction U/S.92 Of The Act. The Assessee In Engaged In The Business Of Provision Of Software Development Services (Swd Services), To It’S Wholly Owned Subsidiary Company In Usa. In Terms Of The Provisions

For Appellant: Shri. C. J. Brito, CAFor Respondent: Shri. Sumeer Singh Meena, CIT, DR

Section 143(3)Section 144C(13)Section 92Section 92(1)Section 92B(1)

assessee received the amounts in time. This has to be determined taking into account the Indian market conditions, the assessee being taken as the tested party Factoring these aspects, we are of the view, that the SBI short term fixed deposit interest rate may be the appropriate ALP rate

ACIT 12(3)(2), Mumbai vs. Morgan Stanley Advantage Services P.Ltd, Mumbai

In the result, appeal of the Revenue is dismissed and Cross

ITA 1215/MUM/2016[2011-12]Status: DisposedITAT Mumbai24 May 2022AY 2011-12

Section 143(3)Section 144C(5)

assessee is Operating Profit to Total Operating Cost (OP/TC). The assessee’s margin is 32.01%. The assessee has been taken as the tested party. 4.3. With the aforesaid background of the functional profile of the assessee and the margins earned by it, let us now proceed to address the inclusion

Deputy Commissioner of Income Tax, Circle- 6(1)(2), Bengaluru vs. M/S. Symbol Technologies India Private Limited, Bengaluru

In the result, appeal by the assessee and that by the Revenue are treated as partly allowed

ITA 2221/BANG/2019[2011-12]Status: DisposedITAT Bangalore20 May 2022AY 2011-12

Bench: Shri N. V. Vasudevan & Shri Laxmi Prasad Sahu

For Appellant: Shri. Aliasgar Rampurwala, CAFor Respondent: Shri. Pradeep Kumar, CIT(DR)(ITAT), Bengaluru

Section 92Section 92(1)Section 92B(1)

types of inventory) 16. Making a working capital adjustment is an attempt to adjust for the differences in time value of money between the tested party and potential comparables, with an assumption that the ITA Nos.2057, 2221/Bang/2019 Page 23 of 31 difference should be reflected in profits. The underlying reasoning ... factors have to be kept in mind (i) The point in time at which the Receivables, Inventory and Payables should be compared between the tested party and the comparables, whether it should be the figures of receivables, inventory and payable at the year end or beginning of the year

M/S. Symbol Technologies India Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 6(1)(2), Bengaluru

In the result, appeal by the assessee and that by the Revenue are treated as partly allowed

ITA 2057/BANG/2019[2011-12]Status: DisposedITAT Bangalore20 May 2022AY 2011-12

Bench: Shri N. V. Vasudevan & Shri Laxmi Prasad Sahu

For Appellant: Shri. Aliasgar Rampurwala, CAFor Respondent: Shri. Pradeep Kumar, CIT(DR)(ITAT), Bengaluru

Section 92Section 92(1)Section 92B(1)

types of inventory) 16. Making a working capital adjustment is an attempt to adjust for the differences in time value of money between the tested party and potential comparables, with an assumption that the ITA Nos.2057, 2221/Bang/2019 Page 23 of 31 difference should be reflected in profits. The underlying reasoning ... factors have to be kept in mind (i) The point in time at which the Receivables, Inventory and Payables should be compared between the tested party and the comparables, whether it should be the figures of receivables, inventory and payable at the year end or beginning of the year

Dow Chemicals International Pvt Ltd. As Successor of Rohm and Haas (India) Pvt Ltd, Mumbai vs. ITO 14 (1)(3), Mumbai

In the result, the appeal of the assessee is allowed partly for statistical purposes

ITA 7936/MUM/2019[2015-16]Status: DisposedITAT Mumbai19 May 2022AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary () Assessment Year: 2015-16 Dow Chemical International Private Income Tax Officer-14(1)(3), Limited As Successor Of Rohm & Hass Room No. 458, 4Th Floor, (India) Private Limited, Vs. Aayakar Bhavan, M.K. Road, Godrej It Park-P2, 1St Floor Block B, 02, Mumbai-400020. Lbs Road, Godrej Business District, Pirojshanagar, Vikhroli (West), Mumbai-400079. Pan No. Aaacr 2855 F Appellant Respondent

For Appellant: Mr. Rajan R. Vora/For Respondent: Dr. Yogesh Kamat, CIT-DR

Section 92C

consideration the economic adjustments on account of the difference in the functions performed and risk assumed (including differences in working capital employed) between the tested party (Appellant) and the companies considered by the learned PO/ Appellant. Objections specific to TP adjustment on export of finished goods ... most appropriate method for determination of arms length price. According to the Ld. TPO, the application of CPM requires gross margins both for the tested party and the comparables. The Ld. TPO found that assessee is a loss-making concern and has incurred selling & distribution and administration expenses and therefore

M/S. Ocwen Financial Solutions Private Limited, Bengaluru vs. Joint Commissioner of Income Tax, Special Range - 5, Bangalore

In the result appeal filed by the assessee stands partly allowed

ITA 2411/BANG/2019[2015-16]Status: DisposedITAT Bangalore13 May 2022AY 2015-16

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 2411/Bang/2019 Assessment Year : 2015-16 M/S. Ocwen Financial Solutions Pvt. Ltd., Pritech Park, Block 12, The Joint Commissioner Unit 2, 5B & 6A Floors, Of Income-Tax, Bellandur Village, Special Range-5, Sarjapur Marathahalli Bangalore. Ring Road, Vs. Bangalore – 560 103. Pan: Aaaco3764E Appellant Respondent : Shri K.R. Vasudevan & Assessee By Ms. Rashmi, Advocates : Dr. Manjunath Karkihalli, Revenue By Cit-Dr Date Of Hearing : 02-03-2022 Date Of Pronouncement : 13-05-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Final Assessment Order Dated 24/09/2019 Passed By The Ld.Jcit, Special Range-5, Bangalore Under Section 143 (3) R.W.S 144C (13) Of The Act, For Assessment Year 2015-16 On Following Grounds Of Appeal: “I. Transfer Pricing The Grounds Mentioned Hereinafter Are Without Prejudice To One Another.

For Respondent: Shri K.R. Vasudevan &

Section 133(6)Section 143Section 92C

types of inventory) 16. Making a working capital adjustment is an attempt to adjust for the differences in time value of money between the tested party and potential comparables, with an assumption that the difference should be reflected in profits. The underlying reasoning is that:  A company will need funding ... factors have to be kept in mind (i) The point in time at which the Receivables, Inventory and Payables should be compared between the tested party and the comparables, whether it should be the figures of receivables, inventory and payable at the year end or beginning of the year

Frost & Sullivan (India) P.Ltd, Chennai vs. DCIT (OSD) 8(1), Mumbai

In the result, the appeal filed by the assessee is treated as allowed and the appeal of the revenue is dismissed

ITA 1124/MUM/2014[2009-10]Status: DisposedITAT Mumbai11 May 2022AY 2009-10

Section 143(3)Section 144C(13)Section 36(1)(vii)Section 40

comparable as observed by this Court in Aptara Technology (P.) Ltd.'s case (supra) rendered on 26th March, 2018 - as follows:- 'merely because the tested party and the comparable provide ITES, they do not become comparable. The content of the services rendered by virtue of IT is to be examined ... base; 16 Frost & Sullivan (India) Pvt. Ltd. 47. From the above, it is vivid that in TNMM, the net profit margin realized by the tested party, an assessee, out of the international transaction is computed in relation to sale effected (as in assessee' case), which is the relevant base

Novell Software Development (India) Private Limited, Bangalore vs. ITO, Bangalore

In the result, appeal filed by assessee stands allowed and appeal filed by the revenue stands dismissed

ITA 319/BANG/2016[2011-12]Status: DisposedITAT Bangalore29 Apr 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 280/Bang/2016 Assessment Year : 2011-12 M/S. Micro Focus Software India Pvt. Ltd. (Earlier Known As Novell Software Development The Income Tax (India) Pvt. Ltd.), Officer, Bagmane Tech Park ‘D’ Ward – 4 (1)(3), Block, Bangalore. ‘Laurel’ 65/2, Vs. C V Raman Nagar, Byrasandra, Bangalore – 560 093. Pan: Aaacn6992K Appellant Respondent & It(Tp)A No. 319/Bang/2016 Assessment Year : 2011-12 (By Assessee) : Smt. Tanmayee Rajkumar, Assessee By Advocate : Dr. Manjunath Karkihalli, Cit Revenue By (Dr) Date Of Hearing : 03-03-2022 Date Of Pronouncement : 29-04-2022 Order Per Beena Pillaipresent Cross Appeals Has Been Filed By Revenue As Well As Assessee Against Order Dated 29.12.2015 Passed By Ld.Ito Ward 5(1)(1)

Section 143(3)Section 144C(13)Section 92C(3)

Companies selected by the TPO, therefore, there is need for making an adjustment to eliminate the difference in the accounting policies for the tested parties and the comparable companies. Having heard the contention of the appellant, as per Rule 10B(3), the margin of the comparables and the tested party

ITO Ward - 5(1)(1), Bangalore vs. M/S Novell Software Development (India) Pvt. Ltd., Bangalore

In the result, appeal filed by assessee stands allowed and appeal filed by the revenue stands dismissed

ITA 280/BANG/2016[2011-12]Status: DisposedITAT Bangalore29 Apr 2022AY 2011-12

Section 143(3)Section 144C(13)Section 92C(3)

Hindustan Dorr-Oliver Ltd, Mumbai vs. ACIT-10(1)(1), Mumbai

The appeal is dismissed

ITA 7116/MUM/2017[2013-14]Status: DisposedITAT Mumbai28 Apr 2022AY 2013-14

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm The Asst. Commissioner Of Hindustan Dorr-Oliver Ltd. Income Tax, 10(1)(1), Chakala, Andheri (E), R.No.209, Vs. Mumbai-400 009 Aayakar Bhavan, M.K. Road, Mumbai-400 020 (Appellant) (Respondent) Pan No. Aaach0964P

For Appellant: NoneFor Respondent: Shri Dr. Yogesh Kamat, CIT DR

Section 143(3)Section 144C(13)Section 40A(2)Section 40A(2)(b)Section 92(2)Section 92BSection 92C

assessee viz. M/s IVRCL Ltd. and M/s Palladium Infrastructure and Project Ltd. and therefore, the AEs should have been taken as a tested party and since the overall margin of the AEs is lower than the margin of the comparable companies, therefore, the impugned transaction of M/s Hindustan Dorr Oliver ... assessee has also purchased equipments of Rs. 69,51,69,632/- from its Associated Enterprises (AEs). Assessee submitted that the seller is the tested party and considering the FAR analysis 7% markup is considered at Arm’s Length Price. 09. The Transfer Pricing Officer rejected the contention of the assessee

M/S. Steer Engineering Pvt. Ltd., Bengaluru vs. Deputy Commissioner of Income-Tax, Circle-6(1)(2), Bengaluru

In the result, appeal of the Assessee is partly allowed

ITA 2071/BANG/2018[2012-13]Status: DisposedITAT Bangalore27 Apr 2022AY 2012-13

Bench: Shri N. V. Vasudevan & Ms. S. Padmavathyassessment Year : 2012-13 M/S. Steer Engineering Private Limited, Vs. Dcit, No.290, 4Th Main, 4Th Phase, Circle – 6(1)(2), Peenya Industrial Area, Nagawara, Bengaluru. Bengaluru – 560 058. Pan : Aabcs 8840 E Appellant Respondent Assessee By : Shri. Narendra Jain, Advocate Revenue By : Mrs. Susan D. George, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 18.04.2022 Date Of Pronouncement : 27.04.2022

For Appellant: Shri. Narendra Jain, AdvocateFor Respondent: Mrs. Susan D. George, CIT(DR)(ITAT), Bengaluru

Section 144CSection 92(1)Section 92ASection 92A(1)Section 92CSection 92C(2)Section 92F

Ratio of operating expenses sales Total Operating cost 265875979 492307220 758183199 Operating 86185241 -56884505 29300736 Profit OP/OC -13.06% 12. According to the TPO, tested party should be selected first and thereafter the comparable companies have to be searched. Therefore, entity level margin of the Assessee cannot be adopted just because ... adjustment to international transactions is determined as under: Mean PLI of A 6.16% comparables Operating cost of B 49,23,07,220 tested party Arms length Operating C = (100+A)% of B 52,26,33,345 Revenue Operating Revenue of D 43,54,22,715 tested party Difference

Accc 30, Mumbai vs. United Shippers Ltd, Mumbai

In the result, appeal filed by the assessee is partly allowed and appeal filed by the AO is dismissed

ITA 3036/MUM/2012[2007-08]Status: DisposedITAT Mumbai26 Apr 2022AY 2007-08

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm The Asst. Commissioner Of United Shippers Ltd. United India Bldg, 2N D Floor, Sir Income-Tax, Circle-30 R.No. 403, 4Th Floor, P.M. Road , Vs. Aayakar Bhavan, M.K. Marg, Fort, Mumbai-400 020 Mumbai-400 001 (Appellant) (Respondent) Pan No. Aaacu0764C The Asst. Commissioner Of United Shippers Ltd. Income-Tax, Circle-30 United India Bldg, 2N D Floor, Sir R.No. 403, 4Th Floor, P.M. Road , Vs. Ayakar Bhavan, Fort, M.K. Marg, Mumbai-400 001 Mumbai-400 020 (Appellant) (Respondent)

For Appellant: Shri Madhur Agarwal, AdvocateFor Respondent: Shri Ms. Vatsalaa Jha, CIT DR

Section 14ASection 92Section 92CSection 92C(3)

adopted the profit level ITA Nos.3036 & 2986/Mum/2012 United Shippers Ltd; AY 2007-08 indicator of operating profit to operating income/sales considering assessee as a tested party selected eight comparable companies. The assessee was given an opportunity to rebut the computation made by the learned transfer-pricing officer. After considering