IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘I’ BENCH, NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1310/DEL/2018 [A.Y. 2011-12] ITA No. 3228/DEL/2018 [A.Y. 2012-13]

Denso Haryana Pvt Ltd Vs. The Dy.CI.T.

B-1/D-4, Ground Floor Circle -7(1)

Mohan Co-operative Industrial Estate New Delhi Mathura Road, Badarpur, New Delhi PAN – AAACD 6817 F ITA No. 1713/DEL/2018 [A.Y. 2011-12] ITA No. 2887/DEL/2018 [A.Y. 2012-13]

TheDy.CI.T. Vs. Denso Haryana Pvt Ltd Circle -7(1) B-1/D-4, Ground Floor New Delhi Mohan Co-operative Industrial Estate Mathura Road, Badarpur, New Delhi PAN – AAACD 6817 F (Applicant) (Respondent)

Assessee By : Shri Sunil Kumar, Adv Department By : ShriOm Prakash, Sr. DR Date of Hearing : 06.01.2025 Date of Pronouncement : 26.03.2025

ORDER

PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-

The above captioned two separate appeals by the assessee and two separate cross appeals by the Revenue are preferred against two separate orders of the CIT(A)-44, New Delhi dated 11.02.2015 and 26.12.2017 pertaining to Assessment Years 2011-12 and 2012-13 respectively.

2. Since the underlying facts in the captioned cross appeals by the assessee and Revenue are same and were heard together, they are disposed of by this common order for the sake of convenience and brevity.

3. Representatives of both the sides agreed to address the appeals on the facts of A.Y 2011-12. On such concession, representatives were heard at length. Case records carefully perused.

1310/DEL/2018 (2011-12) [Assessee’s appeal]

4. Grounds raised by the assessee read as under:

1. That on the facts and in the circumstances of the case and in law, the order passed by the Ld. Assessing Officer ("AO") is bad in law and void ab-initio.

2. That on facts and circumstances of the case and in law, the reference made by the Ld. AO suffers from jurisdictional error as the Ld. AO did not record any reasons in the assessment order based on which he reached the conclusion that it was "expedient and necessary" to refer the matter to the Ld. Transfer Pricing Officer ("TPO") for computation of the arm's length price, as is required under section 92CA(1) of the Income Tax Act, 1961 ("Act").

3. That on facts and circumstances of the case and in law, the Ld. AO / Ld. TPO / Ld. Commissioner of Income Tax (Appeals) ["CIT(A)"] erred in making an addition of INR 7,006,041 on provision of Intra Group services to the returned income of the Appellant by re-computing, the arm's length price of the above international transactions under section 92 of the Act by:

3.1 Erred in facts and in law by not considering that payment made is closely linked to the primary business functions of the Appellant and by arbitrarily rejecting the Transactional Net Margin Method ("TNMM") analysis adopted by the Appellant

3.2 by not appreciating that payment made is closely linked to the primary business functions of the Appellant and erred in analyzing the transaction separately for the determination of arm's length price

3.3 Erred in facts and in law in holding that neither the Appellant has received any service and/ or benefit in lieu of the payment made by it for services availed nor there was any need for such services/ payments; thereby challenging the commercial wisdom of the Appellant in making such payments while passing the order in contrast with the recent judicial pronouncements in this regard;

3.4 Erred in holding that the Appellant has not furnished any documentary evidence as to demonstrate the services received from the AEs.

3.5 Erred in facts and in law, in determining the ALP of the transaction at NIL, by applying CUP method, merely based on presumptions and without furnishing details of price charged in any comparable uncontrolled transaction which is in contravention of the provisions of Rule 10B of the Rules.

4. That on facts and circumstances of the case and in law, the Ld. AO/Ld. TPO/Ld. CIT(A) erred in making an addition on purchase of fixed asset by disallowing th