Rajasthan Prime Steel Processing Center Pvt. Ltd. Vs. DCIT
Parties Involved
Facts Summary
The assessee, Rajasthan Prime Steel Processing Center Pvt. Ltd., is a group company of Honda Trading Corporation, Japan, engaged in manufacturing auto parts and trading steel coils & sheets, dies, auto components & equipment. The assessee filed its Income Tax Return declaring losses for AYs 2009-10 and 2010-11. These cases were selected for scrutiny, and the matter was referred to the Transfer Pricing Officer for determining Arm’s Length Price of international transactions. The assessee’s activities were divided into two segments: Manufacturing and Trading. The TPO benchmarked these segments separately using the TNMM. Consequential adjustments were made, leading to the assessee filing appeals. The assessee contested the segmentation, the comparables chosen by the TPO, and the applicability of TNMM.…
Decision in favour of
Assessee
Legal Issues
- 1. Addition on account of ALP adjustment
- 2. Initiation of penalty under section 271(1)(c) of the Act
- 3. Exclusion of preoperative and non-recurring expenses such as custom duty from operating margin
- 4. Treatment of foreign exchange gain/loss as operating profit/loss
- 5. Allowance of working capital adjustment
Judgment Outcome
Decided in favour of Assessee.
Precedents Relied Upon
5 precedents cited in this judgement.
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