Piaggio Vehicles Pvt.Ltd,, Pune v. Assistant Commissioner of Income-tax, Circle -4,, Pune

ITA 3029/PUN/2017 | 2013-2014
Pronouncement Date: 18-03-2021 | Result: Allowed

Appeal Details

RSA Number 302924514 RSA 2017
Assessee PAN AABCP1225G
Bench Pune
Appeal Number ITA 3029/PUN/2017
Duration Of Justice 3 year(s) 2 month(s) 28 day(s)
Appellant Piaggio Vehicles Pvt.Ltd,, Pune
Respondent Assistant Commissioner of Income-tax, Circle -4,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 18-03-2021
Last Hearing Date 19-07-2019
First Hearing Date 17-03-2021
Assessment Year 2013-2014
Appeal Filed On 20-12-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY J UDICIAL M EMBER . / I TA NO. 3029 /PUN/20 17 / ASSESSMENT YEAR : 2013 - 14 PIAGGIO VEHICLES PRIVATE LIMITED SKY ONE 9 TH FLOOR S. NO.210 FINAL PLOT NO.72 TOWN PLANNING SCHEME YERWADA NO.1 KALYANI NAGAR PUNE - 411 006. PAN : AABCP1225G ....... / APPELLANT / V/S. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE - 4 PUNE. / RESPONDENT A SSESSEE BY : SHRI PERCY PARDIWALA REVENUE BY : SHRI VIJAY BHASKHAR REDDY / DATE OF HEARING : 17 . 0 3 .202 1 / DATE OF PRONOUNCEMENT : 18 . 03 .2021 / ORDER PER PARTHA SARATHI CHAUDHURY JM: THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE DIRECTION OF THE LD. DISPUTE RESOLUTION PANEL - 2 (IN SHORT DRP) MUMBAI DATED 13.09.2017 FOR THE ASSESSMENT YEAR 2013 - 14 AS PER THE FOLLOWING GROUNDS OF APPEAL ON RECORD : - 2 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 ON THE FACTS AND IN THE C IRCUMSTANCES OF THE CASE AND IN LAW THE HON'BLE DRP AND CONSEQUENTIALLY THE LEARNED AO HAVE ERRED IN COMPLETING ASSESSMENT OF THE APPELLANT ON THE FOLLOWING GROUNDS WHICH ARE WITHOUT PREJUDICE TO EACH OTHER: 1 . GENERAL GROUND CHALLENGING THE TRANSFER PRICING ADJUSTMENT OF RS.1 28 70 000 ERRED IN MAKING TRANSFER PRICING ADJUSTMENT AMOUNTING TO RS 1 28 70 000 TO THE VALUE OF INTERNATIONAL TRANSACTION BY REJECTING THE ANALYSIS UNDERTAKEN/ PROVIDED BY THE APPELLAN T FOR ITS INTERNATIONAL TRANSACTION PERTAINING TO EXPORT OF SPARE PARTS AND COMPONENTS TO ITS ASSOCIATED ENTERPRISES. 2 . INAPPROPRIATELY COMBINING OF EXPORT OF SERVICE SPARE AND EXPORT OF PARTS AND COMPONENTS IN GLOBAL SOURCING SEGMENT ERRED IN COMBINING THE INTERNATIONAL TRANSACTIONS PERTAINING TO EXPORT OF SERVICE SPARES TO AE AND EXPORT OF PARTS AND COMPONENTS IN GLOBAL SOURCING SEGMENT AND CONSEQUENTLY FOLLOWING COMBINED B ENCHMARKING APPROACH THEREBY IGNORING THE VITAL DIFFERENCES IN FUNCTIONS PERFOR MED AND RISK UNDERTAKEN BY THE APPELLANT FOR THE INTERNATIONAL TRANSACTIONS PERTAINING TO EXPORT OF SERVICE SPARES TO AE VIS - A - VIS EXPORT OF PARTS AND COMPONENTS IN GLOBAL SOURCING SEGMENT. 3 . INAPPROPRIATE REJECTION OF EXTERNAL TRANSACTIONAL NET MARGIN MET HOD ('TNMM') APPROACH FOR BENCHMARKING INTERNATIONAL TRANSACTION OF EXPORT OF SPARE PARTS AND COMPONENTS IN GLOBAL SOURCING SEGMENT ERRED IN REJECTING THE EXTERNAL TNMM APPROACH ADOPTED BY THE APPELLANT AND INAPPROPRIATELY APPLYING INTERNAL TNMM FOR DETE RMINING THE ARM'S LENGTH PRICE FOR THE INTERNATIONAL TRANSACTION OF EXPORT OF PARTS AND COMPONENTS IN THE GLOBAL SOURCING SEGMENT. 4 . DISREGARDING THE DECISIONS OF HON'BLE PUNE INCOME - TAX APPELLATE TRIBUNAL ('ITAT') FOR IN APPELLANTS CASE FOR AY 2006 - 07 TO A Y 2009 - 10 WITHOUT PREJUDICE TO THE OTHER GROUNDS OF APPEAL THE LEARNED TPO AND THE LEARNED AO HAVE ERRED IN FACTS AND IN CIRCUMSTANCES OF THE CASE BY DISREGARDING THE DECISIONS OF HON'BLE PUNE ITAT IN APPELLANT'S CASE ITSELF FOR A Y 2006 - 07 TO A Y 2009 - 10 AND THEREBY IGNORING THE ANALYSIS CONDUCTED BY THE APPELLANT FOR LOGISTIC SUPPORT SERVICES (EXPORT OF SPARE PARTS AND COMPONENTS IN GLOBAL SOURCING SEGMENT) IN ITS TP STUDY REPORT. 5 . INAPPROPRIATE CONSIDERATION OF FOREIGN EXCHANGE FLUCTUATIONS AS NON OPERATING ITEM WHILE COMPUTING MARGINS OF THE TESTED PARTY SEGMENT AS WELL AS NON AE SEGMENT. ERRED IN CONSIDERING FOREIGN EXCHANGE FLUCTUATIONS AS NON - OPERATING ITEM WHILE COMPUTING OPERATING MARGINS OF THE TESTED PARTY AS WELL AS MARGINS FROM NON - AE SEG MENT 6 . ERRONEOUS LEVY OF PENALTY UNDER SECTION 271(I)(C) OF THE ACT 3 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 ERRED IN PROPOSING TO LEVY PENALTY UNDER SECTION 271(1 )( C) OF THE ACT WITHOUT CONSIDERING THE FACT THAT PROPOSED TRANSFER PRICING ADJUSTMENT TO THE INTERNATIONAL TRANSACTIONS IS JUST ON ACCOUNT OF DIFFERENCE OF OPINION AS TO SELECTION OF METHODOLOGY FO R UNDERTAKING THE TRANSFER PRICING ANALYSIS CONSEQUENTLY RESULTING IN AN ADJUSTMENT TO INCOME. THE APPELLANT CRAVES LEAVE TO ADD ALTER VARY OMIT SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL SO AS TO ENABLE THE HONBLE ITAT TO DECIDE THIS APPEAL ACCORDING TO LAW. 2. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUNDS OF APPEAL WHICH READS AS FOLLOWS: GROUND NO. 7: DEDUCTION OF EDUCATION CESS 7.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE APPELLANT PRAYS THAT THE LIABILITY FOR EDUCATION CESS ON INCOME TAX PAID FOR THE YEAR OUGHT TO BE ALLOWED AS A DEDUCTION WHILE COMPUTING THE TOTAL INCOME. GROUND 8 : RESTRICTING THE RATE OF DIVIDEND DISTRIBUTION TAX PAID ON DIVIDEND PAID TO THE NON - RESIDENT SHAREHOLDER AS PER THE APPLICABLE DOUBL E TAXATION AVOIDANCE AGREEMENT ('DTAA') 8.1 WHETHER THE APPELLANT IS RIGHT IN LAW TO TAKE A VIEW THAT DIVID END DECLARED A ND PAID BY IT TO ITS NON - RESIDENT SHAREHOLDER I.E PIAGGIO & C S.P.A. ITALY (A TAX RESIDENT OF ITALY) IS LIABLE TO BE TAXED AT THE RATE PROVIDED UNDER ARTICLE 11 UNDER THE INDIA - ITALY DOUBLE TAXATION AVOIDANCE AGREEMENT (I.E . 15%) AND NOT AS PER SECTION 115 - O OF THE INCOME - TAX ACT 1961 ('THE ACT') (AS DIVIDEND DISTRIBUTION TAX (DDT) (AT THE RATE OF 16.223%); 8.2 WHERE DDT PAID BY THE APPELLANT AS PER THE PROVISIONS OF SECTION 115 - 0 OF THE ACT IS HELD TO BE IN EXCESS OF THE RATE APPLICABLE FOR TAXABILITY OF DIVIDEND IN INDIA AS PER THE INDIA - ITALY DOUBLE TAXATION AVOIDANCE AGREEMENT IS THE APPELLANT ENTITLED FOR REFUND OF SUCH EXCESS DDT PAID. ADJU D I C ATION OF THE GROUNDS IN APPEAL MEMO 3. THE LD. SENIOR COUNSEL FOR TH E ASSESSEE OPENING HIS ARGUMENT SUBMITTED THAT GROUND NO.1 IS GENERAL IN NATURE AND HENCE NO ADJUDICATION IS REQUIRED. 4 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 4. GROUND NOS. 2 3 AND 4 PERTAINS TO INAPPROPRIATELY COMBINING OF EXPORT OF SERVICE SPARE AND EXPORT OF PARTS AND COMPONENTS IN GLOBAL SOURCING SEGMENT. 5. THE LD. SENIOR COUNSEL FOR THE ASSESSEE REFERRING TO THE ORDER OF THE TRANSFER PRICING OFFICER (TPO) AT PARA 6 DEMONSTRATED THAT THE ACTIVITIES PERFORMED BY THE ASSESSEE COMPANY PERTAINS TO SALE OF SERVICE SPARES AND SOURCING OF SPAR ES AND COMPONENTS. HE FURTHER SUBMITTED THAT IN VARIOUS ASSESSMENT YEARS IN THE CASE OF THE ASSESSEE THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. THEREAFTER THE REVENUE HAS PREFERRED APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND APPEALS ARE AS ON DATE PENDING BEFORE THE HONBLE HIGHER FORUM. 5.1 REFERRING TO PARA 4.2.1 OF THE DRPS ORDER THE LD. SENIOR COUNSEL FOR THE ASSESSEE DEMONSTRATED THE ABOVE STATED FACTS. FOR THE SAKE OF COMPLETENESS THIS RELEVANT PARA IS EXTR ACTED AS FOLLOWS: 4.2.1 FINDINGS FROM THE RECORDS WE FIND THAT SIMILAR DISALLOWANCE MADE IN AY 2012 - 13 WAS UPHELD BY THE DRP. IN RESPECT OF THESE GROUNDS WE HAVE CONSIDERED THE FACTS OF THE CASE THE TPO ORDERS AND THE SUBMISSIONS MADE. WE FIND THAT THIS IS RECURRING ISSUE AND ASSESSEE HAS BEEN GRANTED RELIEF BY THE ITAT IN THE EARLIER AYS HOWEVER THE DEPARTMENT HAS PREFERRED APPEAL BEFORE THE HIGH COURT. AS DRP IS ONLY AN EXTENSION OF THE ARM OF THE AO AND SINCE DRP ORDERS ARE NO MORE APPEALABLE B Y THE REVENUE CONSIDERING THE FACT THAT REVENUE IS STILL AGITATING THE ISSUE TO KEEP ISSUE ALIVE WE HEREBY UPHOLD THE ORDER OF THE TPO AND THE OBJECTIONS FILES ARE HEREBY REJECTED. 5.2 THE LD. SENIOR COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT EVEN IN THE ORDER OF THE TPO THE FACTS ARE CLEAR THAT THE ASSESSEE EXPORTS SERVICE SPARES TO ITS AES AS WELL AS NON AES. IN ADDITION IT ALSO CARRIES OUT SOURCING OF COMPONENTS REQUIRED BY THE AE FOR MANUFACTURING OF TWO AND THREE 5 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 WHEELERS AND SOURCING OF COMPONENTS REQUIRED BY THE AE FOR MANUFACTURING OF FOUR WHEELERS NAMELY NEW QUADRACYCLE POKER (NQP). THAT IT WAS FURTHER ANALYZED BY THE TPO THAT AGAINST TRIBUNAL DECISION IN FAVOUR OF THE A SSESSEE THE REVENUE FILED APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND IT HAS FORMULATED QUESTIONS OF LAW VIDE ORDER NO.ITA 2063 OF 2012 DATED 13.03.2013 WHICH IS AS FOLLOWS: A) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE TRIBUNAL ERRED IN DELETING THE TRANSFER PRICING ADJUSTMENT ACCEPTING ARTIFICIALLY CREATED SUB - SEGMENTS OF INTERNATIONAL TRANSACTIONS ON THE BASIS OF APPLICATION OF SPARES AND COMPONENTS REQUIRED FOR SERVICING OF THE VEHICLES AND REQUIRED FOR MANUFACTUR ING OF VEHICLES IGNORING THAT THE FUNCTION ASSETS AND RISK ANALYSIS FOR THE ASSESSEE THE TESTED PARTY WERE SAME BEING A TRADER OF SUCH SPARES AND COMPONENTS? 5.3 THEREAFTER THE TPO VIDE PARA 11 OF ITS ORDER STATED THAT SINCE THE QUESTION OF LAW HAS BEEN FRAMED IN THE CASE OF THE ASSESSEE BY THE HONBLE HIGH COURT AND CONSIDERING THAT THE FACTS OF THE CASE ARE SIMILAR TO THE YEAR BEFORE THE HONBLE HIGH COURT WITH A HUMBLE VIEW TO PROTECT THE RIGHT OF REVENUE AN ADDITION IS BEING PROPOSED ON THE SIM ILAR LINES THAT OF THE ORDER OF THE PREDECESSOR TPO. IT WAS FURTHER REITERATED IN THAT SAME PARA TP ADJUSTMENT WAS ONLY BEING SUGGESTED TO THE ASSESSING OFFICER TO PROTECT THE INTEREST OF THE REVENUE AT THE STAGE OF HONBLE HIGH COURT. DEMONSTRATING THIS PARA THE LD. SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT EVEN THE TPO WAS CONVINCED WITH THE TRANSACTION OF THE ASSESSEE BUT ONLY TP ADJUSTMENT WAS MADE TO SECURE THE INTEREST OF THE REVENUE AT THE STAGE OF THE HONBLE HIGH COURT. 5.4 THE LD. SENIOR C OUNSEL FOR THE ASSESSEE BROUGHT NOTICE TO THE BENCH THAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 - 09 IN ITA NO.2583/PN/ 2012 WHEREIN THE TRIBUNAL HAS REFERRED TO ASSESSEES OWN CASE 6 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 FOR ASSESSMENT YEAR 2006 - 07 WHEREIN THE FACTS ARE PARA - MATERIA WITH THAT OF THE ASSESSMENT YEAR 2008 - 09 AND THEREIN THE ISSUES RAISED IN THE PRESENT GROUNDS OF APPEAL NO. 2 TO 4 THOSE ISSUES WERE DECIDED IN FAVOUR OF THE ASSESSEE SPECIFICALLY THE ACTIVITIES FOR BENCHMARKING THE TRANSACTION OF THE ASSESSEE IS THAT THE ASS ESSEE IS ENGAGED IN MANUFACTURE AND SALE OF THREE WHEELE D MOTOR VEHICLES FOR TRANSPORTATION OF GOODS AND PASSENGER S AND ALSO SALE OF SPARES AND COMPONENTS OF THREE WHEELED MOTOR VEHICLES MANUFACTURED BY IT TO SUPPORT ITS AFTER SALE MARKET BOTH IN INDIA AND ABROAD. FURTHER THE ASSESSEE IS ALSO ENGAGED IN SOURCING OF COMPONENTS WHICH ARE REQUIRED BY ITS ASSOCIATED ENTERPRISES ABROAD FOR MANUFACTURING OF TWO/THREE/FOUR WHEELED MOTOR VEHICLES. ACCORDING TO THE ASSESSEE HAVING REGARD TO THE NATURE OF TRANSACTI ONS WITH ITS ASSOCIATED ENTERPRISES AND NON ASSOCIATED ENTERPRISE THE TWO KIND OF TRANSACTIONS ARE NOT COMPARABLE AND THEREFORE THERE WAS NO CREDIBLE INTERNAL COMPARABLE TRANSACTIONS WHICH COULD BE USED FOR BENCHMARKING THE IMPUGNED INTERNATIONAL TRANSAC TION OF EXPORT OF SPARES AND COMPONENTS TO ITS ASSOCIATED ENTERPRISE. 6. THE TRIBUNAL FOR THE ASSESSMENT YEAR 2006 - 07 IN ITA NO. 1480/PN/2010 DATED 23.07.2012 HAS DEALT WITH THIS ISSUE IN THE FOLLOWING MANNER: 7. THE ASSESSEE HAS EXPLAINED THE VARIED NATURE OF TRANSACTIONS WHICH ARE COMPRISED IN THE SALES OF SPARES AND COMPONENTS AMOUNTING TO RS 14 62 45 611/ - . IT HAS BEEN EXPLAINED THAT THREE CATEGORIES OF TRANSACTIONS ARE CARRIED OUT IN THE ACTIVITY OF SALE OF SPARES AND COMPONENTS. WE MAY SUMMARIZE THE ACTIVITIES AS FOLLOWS CATEGORY A REPRESENTS SALE OF SPARES BY THE ASSESSEE TO THIRD PARTY DISTRIBUTORS AS WELL AS TO THE AES WHICH ARE REQUIRED FOR THE PURPOSES OF SERVICING THE VEHICLES SOLD BY THE ASSES SEE COMPANY; CATEGORY B REPRESENTS SOURCING OF COMPONENTS REQUIRED BY THE OVERSEAS AES FOR MANUFACTURE OF TWO AND THREE - WHEELERS; AND CATEGORY C REPRESENTS SOURCING OF COMPONENTS REQUIRED BY THE OVERSEAS AES FOR MANUFACTURE OF FOUR - WHEELERS NAMELY NE W QUADRACYCLE POKER. THE POINT SOUGHT TO BE MADE OUT BY THE ASSESSEE IS THAT THE EXPORT TO THIRD PARTIES (I.E. NON - AES) IS COMPRISED OF ONLY CATEGORY A TRANSACTIONS WHICH HAS YIELDED THE MARGIN OF 56.58% WHEREAS THE EXPORTS TO ITS AES COMPRISE OF TRANS ACTIONS OF ALL THREE 7 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 CATEGORIES I.E. A B AND C WHICH HAS YIELDED THE MARGIN OF 11.63% AND THEREFORE THE TWO ARE INCOMPARABLE. BY REFERRING TO THE FOLLOWING CHART DEPICTING THE OPERATING MARGINS OF VARIOUS SUB - SEGMENTS OF THE TRANSACTIONS OF THE S ALES OF SPARES AND COMPONENTS: PARTICUL ARS SALES TO NON - AES EXPORT TO AE DOMESTI C PARTIES SPARES BO (SERVICE SPARES) EXPORTS TO THIRD PARTIES SPARES BO (SERVICE SPARES) TOTAL SALES TO NON - AES SPARES - BO (SERVIC E SPARES) GLOBAL SOURCING AND NQP(SOURCI NG ACTIVITIES) TOTAL EXPORTS TO AE SALES (RS) 529461 000 154510 00 5449120 00 21860 00 13893400 0 141120 000 NET PROFIT (RS) 755910 00 558300 0 8117400 0 87700 0 13832000 147090 00 TOTAL COST (RS) 453870 000 986800 0 4637380 00 13090 00 12510200 0 126411 000 PROFIT MARGIN (ON SALES) 14.27% 36.13% 14.90% 40.12 % 9.96% 10.40% PROFIT MARGIN (ON COST) 16.65% 56.58% 17.50% 67% 11.05% 11.63% THE ASSESSEE HAS POINTED OUT THAT IN RELATION TO CATEGORY A TRANSACTIONS THE OPERATING MARGIN ON EXPORTS TO AES IS 67% AS AGAINST 56.58% WITH RESPECT TO THE EXPORT TO THIRD PARTIES (NON - AES) AND THEREFORE ON THIS COUNT ITSELF THE ADJUSTMENT IN QUESTION IS UNTENABLE. 8. ON THE OTHER HAND THE LEARNED CIT - DEPARTMENTAL REPRESENTATIVE APPEARING FOR THE R EVENUE HAS DEFENDED THE ACTION OF THE AUTHORITIES BELOW BY POINTING OUT THAT THE SUB - SEGMENTATION OF THE ACTIVITY WITHIN THE TRANSACTION OF EXPORT OF SPARES AND COMPONENTS IS NOT CALLED FOR. ACCORDING TO THE REVENUE ALL THE THREE CATEGORIES OF TRANSACTION S NAMELY A B AND C CONSTITUTE A SINGULAR ACTIVITY. THE ENTIRE ACTIVITY IS OF SUPPLY OF SPARES BY THE ASSESSEE TO THIRD PARTY DISTRIBUTORS AND ITS 8 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 AES. IT IS POINTED OUT THAT THE SPARES BEING SUPPLIED TO THIRD PARTIES AND TO THE AES MAY DIFFER IN T HEIR APPLICATIONS AS STATED BUT SPARES REMAIN SPARES. THEREFORE THE SUB - SEGMENTATION CANVASSED BY THE ASSESSEE IN ORDER TO BENCHMARK THE TRANSACTION IS NOT RELEVANT AND HAS BEEN RIGHTLY REJECTED BY THE INCOME - TAX AUTHORITIES. 9. ON THIS ASPECT WE HAVE C AREFULLY CONSIDERED THE RIVAL STANDS. IT IS A WELL - SETTLED PROPOSITION THAT WHILE CARRYING OUT THE TRANSFER PRICING STUDY OF AN INTERNATIONAL TRANSACTION IT IS IMPERATIVE THAT A COMPARISON IS MADE WITH THE SIMILARLY PLACED TRANSACTIONS AS FAR AS POSSIBL E. IN THE PRESENT CASE AS NOTED EARLIER THE ASSESSEE BENCHMARKED ITS INTERNATIONAL TRANSACTION OF EXPORT OF SPARES AND COMPONENTS TO ITS AE ON THE BASIS OF TNM METHOD BY RELYING ON EXTERNAL COMPARABLE COMPANIES. SO HOWEVER THE INCOME - TAX AUTHORITIES HA VE APPLIED AN INTERNAL TNMM MECHANISM IN ORDER TO BENCHMARK THE IMPUGNED INTERNATIONAL TRANSACTION. THE TPO ANALYZED THE PROFITABILITY OF EXPORTS OF SPARES AND COMPONENTS TO AES ON ONE HAND AND COMPARED IT TO THE PROFITABILITY OF EXPORT OF SPARES AND COMP ONENTS MADE BY THE ASSESSEE TO THIRD PARTIES (I.E. NON - AES). AT THE THRESHOLD THE ASSESSEE HAS ASSAILED THE USE OF INTERNAL TNMM MECHANISM AS INAPPROPRIATE AND HAS POINTED OUT THAT THE USE OF TNMM MECHANISM BASED ON EXTERNAL COMPARABLE IS MORE APPROPRIATE . INITIALLY WE DO NOT TAKE UP THIS CONTROVERSY WHICH WE SHALL DEAL WITH A LITTLE LATER. HOWEVER ANOTHER PERTINENT PLEA OF THE ASSESSEE IS TO THE EFFECT THAT EVEN THE INTERNAL TNMM MECHANISM APPLIED BY THE INCOME - TAX AUTHORITIES IS QUITE INAPPROPRIATE AN D THEREFORE THE SAME HAS RESULTED IN AN UNJUSTIFIED ADJUSTMENT TO IMPUGNED INTERNATIONAL TRANSACTION. THIS ASPECT OF THE MATTER IS BEING ADDRESSED AT THIS STAGE. THE ASSESSEE UNDERTAKES THREE CATEGORIES OF TRANSACTIONS IN THE COURSE OF THE SALE OF SPARES AND COMPONENTS. THE THREE CATEGORIES HAVE BEEN NOTED BY US IN THE EARLIER PART OF THE ORDER AND TO BRIEFLY RECAPITULATE THE SAME ARE AS FOLLOWS: CATEGORY A TRANSACTION REPRESENTS SALE OF SPARES BY THE ASSESSEE TO THIRD PARTY DISTRIBUTORS AS WELL AS TO THE AES OF SUCH SPARES/COMPONENTS WHICH ARE REQUIRED FOR THE PURPOSE OF SERVICING THE VEHICLES SOLD BY THE ASSESSEE COMPANY. CATEGORY B TRANSACTIONS REPRESENT SOURCING OF COMPONENTS REQUIRED BY THE OVERSEAS AES FOR MANUFACTURE OF 2/3 WHEELERS AND CATEGO RY C TRANSACTIONS REPRESENT SOURCING OF COMPONENTS REQUIRED BY THE OVERSEAS AES FOR MANUFACTURE OF 4 WHEELERS NAMELY NEW QUADRACYCLE POKER. ON THE BASIS OF SUBMISSIONS AND MATERIAL PUT - FORTH IT IS SOUGHT TO BE EXPLAINED THAT THE CATEGORY B AND CATEG ORY C TRANSACTIONS INVOLVE SUPPLY TO AES (SITUATED IN ITALY) OF SUCH PARTS AND COMPONENTS WHICH ARE USED BY THE AE IN THE MANUFACTURE OF VEHICLES ABROAD. IT IS SOUGHT TO BE MADE OUT THAT THE SOURCE EVALUATION PRICING AND PROCUREMENT TESTS ARE THE PREROG ATIVE OF THE AE AND THAT THE ASSESSEE COMPANY BASED IN INDIA MERELY ASSISTS IN LOGISTIC CO - ORDINATION AND FACILITATION/SUPPORT SERVICES IN RESPECT OF SOURCING OF SUCH COMPONENTS. ON THE OTHER HAND WITH REGARD TO THE CATEGORY A TRANSACTIONS IT INVOLVES SUPPLIES TO THIRD PARTIES AS WELL AS AES OF THE SPARES AND COMPONENTS WHICH ARE REQUIRED FOR THE PURPOSES OF SERVICING THE VEHICLES MANUFACTURED AND SOLD BY THE ASSESSEE COMPANY. IN THIS CATEGORY THE SPARES AND COMPONENTS SUPPLIED ARE MANUFACTURED TO THE SPECIFICATIONS PRESCRIBED THE ASSESSEE COMPANY AND AS PER THE DESIGNS DIES QUALITY PACKAGING ETC. AS MANDATED BY THE ASSESSEE 9 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 COMPANY. ON THIS BASIS THE ASSESSEE HAS ATTEMPTED TO POINT OUT THAT THE MARGINS IN CATEGORY A TRANSACTIONS CANNOT BE COMP ARED WITH THE TRANSACTIONS OF CATEGORY B AND C INASMUCH AS IT INVOLVES FUNCTIONAL AND ECONOMIC DIFFERENCES. IT IS SOUGHT TO BE MADE OUT THAT WITH REGARD TO CATEGORY B AND C TRANSACTIONS THE ASSESSEE DOES NOT EARN THE KIND OF MARGINS AS IT CAN EAR N BY UNDERTAKING TRANSACTIONS OF CATEGORY A. 10. IN OUR CONSIDERED OPINION THE NET PROFIT MARGIN IN ANY PARTICULAR KIND OF ACTIVITY IS INDEED EFFECTED BY VARIOUS FACTORS WHICH ARE INDUSTRY - SPECIFIC AND CAN ALSO BE UNIT - SPECIFIC HAVING REGARD TO THE DEGR EE OF BUSINESS EXPERIENCE ENJOYED BY AN ENTITY. THE FACTORS WHICH CAN BE INDUSTRY - SPECIFIC FOR EXAMPLE CAN BE IN THE FIELD OF COMPETITIVENESS NEW ENTRANTS PRODUCT DIFFERENTIATION AND OTHER GOVERNMENT REGULATIONS ETC. IT IS THEREFORE QUITE IMPERATIVE T HAT WHILE UNDERTAKING TRANSFER PRICING ANALYSIS ONE MUST EXAMINE THE TRANSACTIONS UNDERTAKEN WITH REGARD TO THE RELEVANT FACTORS EFFECTING SUCH TRANSACTIONS VIS - - VIS TRANSACTIONS SOUGHT TO BE COMPARED. IN THIS CONTEXT WE MAY NOW APPRECIATE THE DISTINCTIO N BEING SET - UP BY THE ASSESSEE IN RELATION TO TRANSACTIONS OF CATEGORY B AND C ON ONE HAND AND THE TRANSACTIONS OF CATEGORY A ON THE OTHER. WITH REGARD TO THE TRANSACTIONS OF CATEGORY B AND C WHICH IS IN THE REALM OF SOURCING OF COMPONENTS QUITE CLEARLY THE SAME IS IN THE NATURE OF INDUSTRIAL SUPPLIES WHICH ARE IN - TURN USED BY THE BUYER IN MANUFACTURING OF VEHICLES AND THE SERVICES BEING RENDERED BY ASSESSEE IS MERELY LOGISTIC SERVICE EQUIVALENT. ON THE OTHER HAND THE NATURE OF TRANSACTIONS IN CATEGORY A EFFECTUATED BY THE ASSESSEE TO ITS AE ABROAD AS WELL AS THIRD PARTY DISTRIBUTORS INVOLVE SUPPLY OF SERVICING SPARES AND ARE PURELY IN THE REALM OF AFTER - SALE DISTRIBUTION. THE ASSESSEE WHICH MANUFACTURES VEHICLES AND SELLS THE SAME ALSO UNDE RTAKES SUPPLY OF SPARES AND COMPONENTS REQUIRED FOR SERVICING OF SUCH VEHICLES SOLD BY IT. QUITE CLEARLY THE SUPPLIES SO UNDERTAKEN ARE FROM ALREADY FIRMED - UP SOURCES INASMUCH AS THE ASSESSEE IS THE MANUFACTURER OF VEHICLES IN WHICH SUCH COMPONENTS ARE USED AND AT THE TIME OF PROCUREMENT FOR MANUFACTURING THE ASSESSEE HAS MANDATED THE DIES DESIGN QUALITY WARRANTIES ETC. THUS SUPPLY OF SPARE - PARTS AND COMPONENTS AS PURELY AFTER - SALES DISTRIBUTION RESULTS IN HIGHER MARGINS. IN CONTRAST THE SOURCING OF PRODUCTS FOR OVERSEAS AE ENTAILING CATEGORY B AND C TRANSACTIONS THE ASSESSEE HAS VERY LIMITED ROLE TO PLAY WHICH IS AKIN TO LOGISTICS SUPPORT SERVICE PROVIDER. 11. IN THIS BACKGROUND WE THEREFORE DEEM IT PROPER TO CONCLUDE THAT EVEN ACCORDING T O THE INTERNAL TNMM MECHANISM SOUGHT TO BE APPLIED THE COMPARISON OF MARGIN OF TRANSACTIONS OF CATEGORY B AND C UNDERTAKEN WITH THE AES IS INCOMPARABLE WITH THE TRANSACTIONS UNDERTAKEN WITH THE THIRD PARTIES (I.E. NON - AES) WHICH ARE PURELY IN THE NATU RE OF CATEGORY A. OSTENSIBLY THE TRANSACTIONS OF CATEGORY B AND C ARE NOT UNDERTAKEN WITH THIRD PARTIES (I.E. NON - AES). 12. SO HOWEVER IN SO FAR AS THE TRANSACTIONS OF CATEGORY A REPRESENTING EXPORT OF SPARES AND COMPONENTS WHICH ARE REQUIRED FO R THE PURPOSE OF SERVICING OF VEHICLES SOLD BY THE ASSESSEE COMPANY THE TRANSACTIONS UNDERTAKEN WITH THIRD PARTY DISTRIBUTORS (I.E. NON - AES) ARE COMPARABLE TO THE TRANSACTION WITH THE AES. ON THIS ASPECT IT IS EVIDENT ON THE BASIS OF THE TABULATION IN P ARA 7 THAT THE PROFIT MARGIN (ON COST) IN RELATION TO EXPORT TO AES IS 67% AND ON TRANSACTIONS OF EXPORTS TO THIRD PARTY DISTRIBUTORS (I.E. NON - AES) IS 56.58% AND THE SAME CLEARLY DEPICTS THAT THE TRANSACTION UNDERTAKEN BY THE ASSESSEE OF CATEGORY A WI TH ITS AES NAMELY EXPORT OF SPARES AND COMPONENTS WHICH ARE REQUIRED FOR THE PURPOSE OF SERVICING OF VEHICLES SOLD BY THE ASSESSEE HAVE BEEN 10 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 UNDERTAKEN AT AN ARMS LENGTH PRICE AND THE SAME DOES NOT REQUIRE ANY TRANSFER PRICING ADJUSTMENT AS DONE BY THE INCOME - TAX AUTHORITIES. THE SAME DECISION WAS ALSO FOLLOWED BY THE TRIBUNAL FOR THE ASSESSMENT YEAR 2007 - 08 IN ASSESSEES OWN CASE AGAIN IN ITA NO.1614/PN/2011 DATED 28.06.2013. THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 - 09 (SUPRA .) AFTER GOING THROUGH THE FINDINGS FOR ASSESSMENT YEAR 2006 - 07 (SUPRA.) OBSERVED AND HELD THAT IN RELATION TO THE INTERNATIONAL TRANSACTIONS OF EXPORT TO THE ASSOCIATED ENTERPRISES RELATING TO THE SPARES AND COMPONENTS REQUIRED IN SERVICING OF VEHICLE MAN UFACTURED AND SOLD BY THE ASSESSEE THE TRIBUNAL FOUND THAT EVEN ON AN APPLICATION OF INTERNAL TNM MECHANISM THE INTERNATIONAL TRANSACTIONS UNDERTAKEN WITH ASSOCIATED ENTERPRISES WAS AT AN ARM'S LENGTH PRICE. 7. THAT EVEN IN THE PRESENT ASSESSMENT YEAR I.E. 2013 - 14 THE SAME POSITION HOLDS GOOD AS CAN BE SEEN FROM THE TABULATION ENUMERATED BY THE TPO AT PARA 6 OF HIS ORDER. THEREFORE FOLLOWING THE AFORESAID PRECEDENT THE ADJUSTMENT COMPUTED BY THE TPO WITH REGAR D TO THE EXPORT TO ASSOCIATED ENTERPRISES OF SPARES AND COMPONENTS REQUIRED FOR THE PURPOSE OF SERVICING OF VEHICLES SOLD BY ASSESSEE IS UNTENABLE AS THE TRANSACTIONS UNDERTAKEN WITH THIRD - PARTY DISTRIBUTORS ARE COMPARABLE TO THE TRANSACTION WITH THE ASSO CIATED ENTERPRISES. 8. THAT FURTHER REGARDING OTHER PART OF THE TRANSACTIONS RELATING TO EXPORT OF SPARES AND COMPONENTS WHICH ARE REQUIRED BY THE ASSOCIATED ENTERPRISES FOR MANUFACTURE OF TWO AND THREE WHEELERS UNDERTAKEN BY THEM AND THE COMPONENTS WHI CH ARE REQUIRED BY THE OVERSEAS ASSOCIATED ENTERPRISES FOR MANUFACTURE OF FOUR WHEELERS NAMELY NEW QUADRACYCLE POKER. FOR THESE 11 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 TWO CATEGOR IES OF TRANSACTIONS THE TRIBUNAL NEGATED THE INVOKING OF INTERNAL TNM MECHANISM BY THE TPO AND INSTEAD REMANDED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE PLEA SETUP BY THE ASSESSEE. THE RELEVANT PORTION OF THE DECISION OF THE TRIBUNAL FOR ASSESSMENT YEAR 2006 - 07 READS AS FOLLOWS: 13. NOW WE ARE LEFT WITH THE TRANSACTIONS OF CATEGORY B AND C WHICH HAVE BEEN UNDERTAKEN BY THE ASSESSEE WITH ITS AE. IN SO FAR AS SUCH TRANSACTIONS ARE CONCERNED THERE IS NO INTERNAL COMPARABLE TRANSACTION INASMUCH AS SUCH LIKE TRANSACTIONS HAVE NOT BEEN CARRIED OUT WITH NON - AES. THE TRANSACTIONS OF SUCH N ATURE INVOLVING SOURCING OF SPARES AND COMPONENTS USED IN THE MANUFACTURE OF VEHICLES UNDERTAKEN BY THE AE ABROAD HAVE NOT BEEN UNDERTAKEN BY THE ASSESSEE WITH NON - AES. THEREFORE IN THE ABSENCE OF ANY INTERNAL TRANSACTIONS WITH THIRD PARTIES WITH SIMILAR FUNCTIONS AND ECONOMIC SCENARIO BENCHMARKING OF TRANSACTIONS OF CATEGORY B AND C UNDERTAKEN WITH AES CANNOT BE DONE APPROPRIATELY BY INVOKING THE INTERNAL TNMM MECHANISM. IN THIS CONTEXT THE ASSESSEE POINTED OUT THAT FOR BENCHMARKING THE TRANSACTION S BETWEEN THE ASSESSEE AND THE AES IN RESPECT OF SUCH ACTIVITIES THE ASSESSEE HAS UNDERTAKEN COMPARISON WITH OPERATING MARGINS EARNED BY THIRD PARTY SUPPORT SERVICE PROVIDERS IN INDIA AND TABULATION IN THIS REGARD HAS BEEN PLACED IN PAGE 223 OF THE PAPER BOOK NO. II. IT IS SOUGHT TO BE MADE OUT THAT THE MARGINS DECLARED BY THE ASSESSEE ON SUCH ACTIVITY AT 11.05% COMPARE FAVOURABLY WITH THE AVERAGE OPERATING MARGINS EARNED BY THIRD PARTY SUPPORT SERVICE PROVIDER COMPANIES IN INDIA WHICH WORKED OUT TO 5.1%. IN OUR CONSIDERED OPINION THE AFORESAID PLEA OF THE ASSESSEE IS LIABLE TO BE EXAMINED WITH RESPECT TO ITS FACTUAL ASPECTS. FOR THE STATED PURPOSE WE THEREFORE REMAND THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL CARRY OUT THE REQUISITE V ERIFICATION EXERCISE AND AFTER BEING SATISFIED HE SHALL PASS AN APPROPRIATE ORDER IN ACCORDANCE WITH LAW ON THIS ASPECT. IN THE PRESENT ASSESSMENT YEAR ALSO FOLLOWING THE AFORESAID PRECEDENT WE RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFI CER WHO SHALL CARRY REQUISITE VERIFICATION/EXERCISE AND RE - ADJUDICATE THE MATTER WHILE COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. WE DIRECT THE ASSESSING OFFICER TO RE - DETERMINE THE ALP OF THE IMPUGNED INTERNATIONAL TRANSACTION OF EXPORT OF SPARES A ND COMPONENTS ON THE BASIS OF THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006 - 07 (SUPRA.). THUS GROUND NOS. 2 3 AND 4 RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 12 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 9. WITH REGARD TO GROUND NO.5 THE LD. SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE MAIN GROUNDS IN THIS APPEAL ARE BEING REMANDED TO THE FILE OF THE ASSESSING OFFICER SIMILARLY GROUND NO.5 MAY ALSO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR THE SAKE OF COMPLETENESS AND RE - ADJUDICAT ION WHILE COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. 10. THE LD. DR CONCEDED TO THE ARGUMENTS PUT FORTH BY THE LD. SENIOR COUNSEL FOR THE ASSESSEE. 11. AFTER HEARING THE PARTIES HEREIN WE REMAND GROUND NO.5 ALSO TO THE FILE OF THE ASSESSING OFFIC ER FOR RE - ADJUDICATION AS INDICATED HEREINABOVE. THUS GROUND NO.5 RAISED IN APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 12. GROUND NO.6 RAISED IN APPEAL BY THE ASSESSEE IS PREMATURE AT THIS STAGE AND HENCE NO ADJUDICATION IS REQUIRED. A DJUDICATION OF ADDITIONAL GROUNDS 13. NOW COMING TO THE ADDITIONAL GROUND IN APPEAL THE FIRST GROUND PERTAINS TO WHETHER EDUCATION CESS CAN BE ALLOWED AS DEDUCTION ? 14. THE LD. SENIOR COUNSEL FOR THE ASSESSEE HAS PLACED STRONG RELIANCE ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SESA GOA LIMITED VS. JOINT COMMISSIONER OF INCOME TAX (2020) 107 CCH 0376 MUMHC TAX APPEAL NO.17 OF 2013/18 OF 2013 WHEREIN THE QUESTION RAISED BEFORE THE HONBLE HIGH COURT WAS WHETHER EDUCATION CESS AND HIGHER AND SECONDARY EDUCATION CESS COLLECTIVELY REFERRED TO AS CESS IS 13 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 ALLOWABLE AS A DEDUCTION IN YEAR OF ITS PAYMENT . IT WAS HELD AND OBSERVED BY THE HONBLE HIGH COURT THAT LEGISLATURE IN SECTION 40(A)(II) HAS PROVIDED THAT ANY RATE OR TAX LEVIED ON PROFITS AND GAINS OF BUSINESS OR PROFESSION SHALL NOT BE DEDUCTED IN COMPUTING INCOME CHARGEABLE UNDER HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. THERE IS NO REF ERENCE TO ANY CESS. OBVIOUSLY THEREFORE THERE IS NO SCOPE TO ACCEPT THAT CESS BEING IN NATURE OF A TAX IS EQUALLY NOT DEDUCTABLE IN COMPUTING INCOME CHARGEABLE UNDER HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. IF LEGISLATURE INTENDED TO PROHI BIT DEDUCTION OF AMOUNTS PAID BY A ASSESSEE TOWARDS EDUCATION CESS OR ANY OTHER CESS THEN LEGISLATURE COULD HAVE EASILY INCLUDED REFERENCE TO CESS IN CLAUSE (II) OF SECTION 40(A) OF THE ACT. THE FACT THAT LEGISLATURE HAS NOT DONE SO MEANS THAT LEGISL ATURE DID NOT INTEND TO PREVENT DEDUCTION OF AMOUNTS PAID BY THE ASSESSEE TOWARDS CESS WHEN IT COMES TO COMPUTING INCOME CHARGEABLE UNDER HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. THOUGH THE CLAIM FOR DEDUCTION WAS NOT RAISED IN ORIGINAL RETURN OR BY FILING REVISED RETURN ASSESSEE HAD INDEED ADDRESSED A LETTER CLAIMING SUCH DEDUCTION BEFORE ASSESSMENT COULD BE COMPLETED. HOWEVER EVEN IF COURT PROCEED ON BASIS THAT THERE WAS NO OBLIGATION ON ASSESSING OFFICER TO CONSIDER CLAIM FOR DEDUCTION IN SUCH LETTER THE COMMISSIONER (APPEALS) OR ITAT BEFORE WHOM SUCH DEDUCTION WAS SPECIFICALLY CLAIMED WAS DUTY BOUND TO CONSIDER SUCH CLAIM. THIS SUBSTANTIAL QUESTION OF LAW WAS ANSWERED IN FAVOUR OF THE ASSESSEE STATING THAT THE AMOUNT PAID BY THE ASSESSEE TOWARDS EDUCATION CESS HAS TO BE ALLOWED AS DEDUCTION. 15. SIMILAR VIEW WAS ALSO TAKEN BY THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF PR. COMMISSIONER OF INCOME TAX KOTA VS. M/S. CHAMBAL FERTILIZERS AND CHEMICALS LTD. INCOME TA X APPEAL NO.52/2018 ( RAJ HC) . 14 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 16. THE LD. SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE MAIN GROUNDS OF THIS APPEAL HAVE BEEN REMANDED TO THE FILE OF THE ASSESSING OFFICER SIMILARLY THIS GROUND MAY ALSO BE REMANDED TO THE FILE OF THE ASSESSING OFF ICER. 17. THE LD. DR CONCEDED TO THE SUBMISSIONS PUT FORTH BY THE LD. SENIOR COUNSEL FOR THE ASSESSEE. 18. AFTER HEARING BOTH THE PARTIES HEREIN THIS ADDITIONAL GROUND IN RESPECT OF EDUCATION CESS IS ALSO REMANDED TO THE FILE OF THE ASSESSING OFFICER TO ADJUDICATE THE ISSUE IN VIEW OF THE PRINCIPLES LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. COMMISSIONER OF INCOME TAX KOTA VS. SESA GOA LIMITED VS. JCIT (SUPRA.) AND HONBLE RAJASTHAN HIGH COURT IN THE CASE OF M/S. CHAMBAL FER TILIZERS AND CHEMICALS LTD. (SUPRA.). THUS ADDITIONAL GROUND NO.1 RAISED IN APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 19. REFERRING TO THE OTHER ADDITIONAL GROUND NO.8.1 & 8.2 THE LD. SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE REQUIRES FACTUAL VERIFICATION IN RESPECT OF THE VARIOUS DTAA AGREEMENTS INVOLVED THEREIN AND AFTER VERIFICATION OF SUCH FACTS IN PURSUANCE TO THOSE DTAA AGREEMENTS A CONCLUSIVE FINDING CAN BE ARRIVED AT. THEREFORE IN THE INTEREST OF JUSTICE THESE ADDITIONAL GROUNDS MAY ALSO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. 20. THE LD. DR CONCEDED TO THIS ARGUMENT PUT FORTH BY THE LD. SENIOR COUNSEL FOR THE ASSESSEE. 15 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 21. AFTER HEARING THE PARTIES HEREIN AND TAKING TOTALITY OF FACTS AND CIRCUMSTANCES INTO CONSIDERATION WHEREIN THE DTAA AGREEMENTS HAS TO BE LOOKED INTO AND FACTUAL ASPECTS NEEDS TO BE VERIFIED. THEREFORE THESE ADDITIONAL GROUNDS ARE ALSO REMANDED TO THE FILE OF THE ASSESSING OFFICER WHO SHALL ADJUDICATE THESE ISSUES WHILE COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. THUS ADDITIONAL GROUND NOS. 8.1 & 8.2 RAISED IN APPEAL BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 22. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED ON 18 TH DAY OF MARCH 20 2 1 . SD/ - SD/ - INTURI RAMA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 18 TH MARCH 202 1 SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 13 PUNE. 4. THE PR. CIT - 5 PUNE. 5 . / DR ITAT C BENCH PUNE. 6. / GUARD FILE. / BY ORDER // TRUE COPY // / PRIVATE SECRETARY / ITAT PUNE . 16 ITA NO. 3029 /PUN/20 17 A.Y. 2013 - 14 DATE 1 DRAFT DICTATED ON 17 . 03 .202 1 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 1 8 . 03 .202 1 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER