THE DEPUTY CIT Vs. OWENS CORNING INDUSTRIES (INDIA) PVT. LTD.
LAWS(IT)-2014-10-18
INCOME TAX APPELLATE TRIBUNAL
Decided on October 13,2014

The Deputy Cit Appellant
VERSUS
Owens Corning Industries (India) Pvt. Ltd. Respondents

JUDGEMENT

Asha Vijayaraghavan, Member (J) - (1.) THE above appeals both by the assessee and the Department are directed against the directions of the Dispute Resolution Panel (DRP), Hyderabad dated 20.12.2013 for A.Y. 2009 -10.
(2.) BRIEF facts of the case are that M/s. Owens Corning Industries (India) Pvt. Ltd., the present assessee, is engaged in the business of manufacturing and trading of glass fibre products and articles thereof. It produces glass fibre based reinforcement products including chopped strand mat, roving and woven and stitched products and speciality products such as Cem -FIL, TWINTEX, Glassmen and other technical fabrics. The group produces glass fibre used to reinforce composite materials used in transportation, electronics, marine, wind energy and other high performance markets to insulation, roof and stone veneer which is wholly owned subsidiary of OCV Chambery International, France. OCV Reinforcements Manufacturing Ltd., has undergone change of name as Owens Corning Industries (India) Pvt. Ltd. The assessee filed its return of income for A.Y. 2009 -10 on 13.9.2009 admitting total income of Rs. 18,50,68,771. A reference u/s. 92CA was made on 15.12.2011 by the DCIT, Circle -16(3), Hyderabad (the AO) with the approval of CIT -IV, Hyderabad to the DCIT (Transport Pricing Officer -II). The TPO -II passed an order u/s. 92CA(3) of the Act on 13.12.2012 in which the arms length price (ALP) was determined at Rs. 2,04,46,304 as against the price charged by the assessee in the international transactions at Rs. 4,40,27,472 and the shortfall of Rs. 2,35,81,168 was treated as transfer pricing adjustment u/s. 92CA of the Act. The AO passed the draft assessment order u/s. 143(3) r.w.s. 92CA r.w.s. 144C on 6.3.2013 making an addition of Rs. 2,35,81,168 towards ALP adjustment as determined by the TPO and disallowed excess claim of depreciation of Rs. 17,51,976. Thus, the AO determined the total income at Rs. 21,04,01,914 as against income returned of Rs. 18,50,68,770.
(3.) AGGRIEVED by the draft assessment order and the order passed by the TPO, the assessee has submitted an application on 10.4.1023 to the Dispute Resolution Panel (DRP), Hyderabad raising objection against the addition made by the AO/TPO. The DRP relied on the decisions in assessee's own case for A.Ys. 2001 -01 and 2007 -08 and granted depreciation on the non -compete and marketing net worth rights. The DRP, however, upheld the restriction made by the TPO of royalty payment to 2.0% instead of 4% of net sales. Both assessee and the Department have come up in appeal against the order of the DRP and we dispose of both the appeals by this consolidated order.;


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