The Tribunal affirmed the inclusion of appropriate comparables in transfer pricing adjustments and acknowledged the necessity of allowing working capital adjustments based on functional differences.

1. This appeal by assessee is directed against the additions made in assessment order passed under section 143(3) r.w.s. 144C(13) dated 31/05/2024, passed in pursuance of direction of Dispute Resolution Panel (DRP) under section 144C(5) dated 27/05/2024. The assessee has raised the following grounds of appeal:-

“GROUNDS OF APPEAL

Based on the facts and in the circumstances of the case and in law, DSV Air & Sea Private Limited ('the Appellant' or 'DSV India') respectfully craves leave to prefer an appeal under Section 253 of the Income Tax Act, 1961 ('Act") against the order dated on 30 May 2024 passed by the Additional Joint/Deputy/Assistant Commissioner of Income-tax/Income-tax officer, National Faceless Assessment Centre, New Delhi, Assessment Unit, Income-Tax Department (learned AO") issued under Section 143 (3) read with Section 144C (13) read with Sections 144(B), ('final assessment order"), after considering the adjustments proposed by the Asst. Commissioner of Income Tax, Transfer pricing Officer-1(2)(1), Mumbai ('learned TPO') in his order passed under Section 92CA (3) of the Act and in pursuance of the Directions issued by Dispute Resolution Panel-1 (DRP-

1) ('Hon'ble DRP"), Mumbai, on the following grounds:

On the facts and circumstances of the case and in law, the learned AO/Hon'ble DRP/learned TPO, has:

General Ground

1. erred in assessing the total taxable income of the Appellant at INR 17,99,47,172 as against of Rs. 9,98,90,730 as reported in the ROI filed by the Appellant, Time barred proceedings

2 the assessment order dated 30 May 2024 passed by the learned AO under Section 143 (3) of the Act is beyond the time limit prescribed under Section 153 of the Act and hence time barred and liable to be quashed, Reference to the TPO

3.erred in making a reference of the Appellant's case to the learned TPO under Section 92CA (1) of the Act, without satisfying any of the conditions laid down in clauses (a) to (d) of Section 92C(3) and then making a TP adjustment of INR 8,00,56,442 to the total income of the Appellant which is bad in law;

Application of additional quantitative filters for benchmarking the transaction

4 erred in applying turnover filter, i.e. rejecting companies with turnover greater than or equal to 10 times or less than or equal to 10 times of Appellant's turnover selection of operation of comparable companies.

Rejection of comparables selected by the Appellant in in TP documentation

5. erred in rejecting Unique Logistics Intl (India) Private Limited on the basis that it falls the related party transactions (RPT) to sales filter of 25% applied by the Appellant as well as the TPO, citing inclusion of director's remuneration while calculating the related party transactions erred in rejecting Lords Freight India Private Limited in the basis that public data is unavailable, disregarding the fact that the Appellant had submitted the latest audited financial statements of the company before the learned TPO as well as the Hon'ble DRP

7. erred in rejecting Connect Cargo Private Limited on the basis that it fails the turnover filter of 1/10 times to 10times applied by the TPO disregarding the fact that the company is functionally similar to the Appellant;

Introduction of additional comparables by the learned TΡΟ

8. erred in accepting North Eastern Carrying Corporation Limited in the final set of comparables disregarding the fact that the company is engaged in only road transportation services and hence is func