TOYODA MICROMATIC MACHINERY INDIA PVT. LTD., NEW DELHI Vs DCIT, CIRCLE- 25(2), NEW DELHI

This case involves an appeal by Toyoda Micromatic Machinery India Pvt. Ltd. against an order from the Commissioner of Income Tax (Appeals). The appeal challenges the Assessing Officer's decision to refer the matter to the Transfer Pricing Officer (TPO) without sufficient justification and disputes the TPO's determination of the arm's length price. Additionally, the appeal questions the treatment of expatriate costs in calculating the Profit Level Indicator under the Resale Price Method.

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘I-2’, NEW DELHI
BEFORE SH. KULDIP SINGH, JUDICIAL MEMBER
AND
SH. PRASHANT MAHARISHI, ACCOUNTANT MEMBER
(Through Video Conferencing)
ITA No.3834/DEL/2017
Assessment Year: 2011-12

Toyoda Micromatic Machinery
India Private Limited,
7, Barakhamba Road,
New Delhi
PAN No. AADCT0116G
(APPELLANT) 

Vs

DCIT
Circle – 25 (2)
New Delhi
(RESPONDENT)

Appellant by Shri Ajit Korde Adv
Shri Arun Bhadauria, Adv
Shri Prashant MeharChandani,
Adv
Respondent by Sh. Rakesh Kumar, SR. DR

Date of hearing: 16/10/2020
Date of Pronouncement: 10/12/2020

ORDER

PER PRASHANT MAHARISHI, AM:

1. This appeal is filed by the assessee against the order of The Commissioner Of Income Tax (Appeals) – 44, New Delhi [ The ld CIT A] dated 27th of December 2016 for assessment year 2011 – 12 wherein the appeal filed by the assessee against the order of The Deputy Commissioner Of Income Tax, Circle – 25 (2) New Delhi [ The Ld AO] passed u/s 143 (3) read with Section 144C of the income tax act 1961 [The Act] dated 28th of April 2015, was partly allowed.

2. The assessee has raised the following grounds of appeal :-

1. The order passed by the Learned Commissioner of Income Tax (Appeals) is bad in law and void ab-initio as it confirms the order of the Assessing Officer (AO) who has failed to record any valid and substantive reasons in concluding that it was expedient and necessary to refer the matter to the Transfer Pricing Officer (TPO) for computation of arm’s length price, as required under section 92CA(1) of the Income-tax Act, 1961 (“Act”).

2. That on facts and in law, the CIT (A) has erred in confirming that Learned TPO/AO has discharged his statutory onus by establishing that the conditions specified in clause (a) to (d) of Section 92C (3) of the Act have been satisfied before disregarding the arm’s length price determined by the Appellant and proceeding to determine the arm’s length price himself.

3. The Learned CIT(A) has erred on facts and in law by treating the expatriate cost as part of the expense while providing for the computation of the Profit Level Indicator (PLI) for Resale Price Method (RPM) which is in violation of the Rule 10B(1)(b) of the Income - tax Rules 1962 (“Rules”).

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