- (1.) The subject matter of challenge in this appeal is a judgment and order dated March 14, 2013 since Manaksia Ltd. v. Addl. CIT,2014 2 ITR 220, by which the learned Tribunal has set aside the findings of the Dispute Resolution Panel (DRP, for brevity) and, consequently, the additions made by the Assessing Officer taking into account the adjustment made by the Transfer Pricing Officer (TPO, for brevity) on the basis of the directions of the Dispute Resolution Panel were deleted. The Dispute Resolution Panel had already granted substantial relief to the assessee holding as follows: 4.1.2. We find that the Transfer Pricing Officer was justified in rejecting the rectification application. If the assessee has not given the segmental details of sales to associated enterprise by way of trading and by way of manufactured goods during the transfer pricing proceedings the Transfer Pricing Officer definitely cannot decide the matter during the proceeding for rectification. However, we find that the Transfer Pricing Officer adjusted the entire sales of Rs. 731.80 crores of the assessee. The adjustment is required to be made in respect to international transactions. But we cannot make any difference in the given circumstances between the sales of the finished goods and the sales of manufactured goods to associated enterprise. Adjustment will have to be limited on total sales to associated enterprise only. Therefore, we direct the Transfer Pricing Officer to make proportionate adjustment on total sales to associated enterprise only. Adjustment should not be made on non-associated enterprise sales. Aggrieved by the order of the Dispute Resolution Panel the assessee approached the learned Tribunal. The learned Tribunal was of the opinion that MALCO cannot be treated as a comparable unit to the assessee. It is on this basis that the aforesaid order of the Dispute Resolution Panel was set aside and the additions deleted.
(2.) Aggrieved by the order of the learned Tribunal the present appeal was preferred.
(3.) Mr. Bhowmick, learned advocate appearing for the appellant submitted with some justification that the matter was referred to the Transfer Pricing Officer under section 92CA of the Income-tax Act, 1961 and based on the findings of the Transfer Pricing Officer, a draft assessment was made which the assessee challenged before the Dispute Resolution Panel under section 144C of the Act. The Dispute Resolution Panel reduced the additions proposed by the draft assessment. The Transfer Pricing Officer had taken MALCO as a comparable unit. The Dispute Resolution Panel has also accepted that MALCO was a comparable unit for reasons indicated therein. It would also appear from the order of the Dispute Resolution Panel that certain comparables, cited by the assessee, could not be tested because the assessee himself omitted to disclose the required particulars. In case the learned Tribunal was of the opinion that MALCO was not comparable to the assessee, the matter should have been remanded to the Transfer Pricing Officer. By omitting to do so, the entire exercise referring the matter to the Transfer Pricing Officer and the concerned section of the Act have both been nullified.;