Prinipal Commissioner Of Income Tax-5 v. M/S Kobelco Construction Equipment India Limited

$~40 IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 1096/2017 PRINIPAL COMMISSIONER OF INCOME TAX-5..... Appellant Through :Mr Sanjay Kumar and Mr RahulChaudhary, Advocates. versus M/S KOBELCO CONSTRUCTION EQUIPMENT INDIA LIMITED..... Respondent Through :Mr Mayank Nagi, Advocate. CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHATHON'BLE MR. JUSTICE SANJEEV SACHDEVAO R D E R%04.12.2017ITA 1096/2017 & CM No.43768/2017(delay in filing appeal for 20days) 1.The Revenue urges that the application of the Resale PriceMethod (RPM) was not justified and instead the Transactional NetMargin Method (TNMM) was appropriate. 2.The Assessee had declared five broad heads of InternationalTransactions - Assessment Year 2008-2009; it selected RPM for twoof them, i.e. purchase of finished goods and purchase of spare parts. For the other three activities, the Comparable Uncontrolled Price(CUP) applies. 3.The T.P.O. - and later the Assessing Officer - applied theTNMM for the transaction, which is the subject-matter of this Appeal,i.e. purchase of finished goods. The Assessee appealed successfully. 4.The CIT(Appeals) upheld its plea that the RPM was theappropriate method.Since no value addition was involved in thefurther sale of the products, so purchased, the Assessee has enteredinto transactions with its dealers for the onward sale of theproduct/goods imported or were purchased by it from OverseasSuppliers. 5.The Income Tax Appellate Tribunal (ITAT) confirmed thefinding of the CIT (Appeals). This Court has pronounced judgments(notably – Principal Commissioner of Income Tax-6 versus MakemyTrip India Private Limited : ITA No.881/2017 dated 07.11.2017),held that mere disagreement on the application of the RPM by itself –per se does not translate into question of law. 6.Unless the Revenue or the party concerned establishes to theCourt that the application of one method or the other results indistorted outcomes, the dispute could not be characterised as asubstantial question of law. 7.Applying the ratio in Makemy Trip (supra), this Court holdsthat no substantial question of law arises. 8.The other question of law urged with respect to the exclusion ofcomparables (i.e.T&I Global Limited).The Assessing Officer included that entity as a comparable.The CIT(Appeal) and ITATgranted relief holding that the T&I Global Limited was not purelyinvolving its procurement of purchase and distribution so as to makeit a comparable with the Assessee but rather was also engaged inmanufacturing activity. This Court finds no substantial question oflaw on this aspect. 9.As a consequence, in view of the foregoing discussion, there isno merit in the Appeal. No substantial question of law arises. 10.The Appeal is, therefore, dismissed. S. RAVINDRA BHAT, J DECEMBER 04, 2017‘Sn’ SANJEEV SACHDEVA, J