IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.5132/Del/2024A.Y 2021-22)

And S.A No. 608/Del/2025 in ITA No.5132/Del/2024 (A.Y 2021-22)

Idemitsu Lube India Private DCIT Limited,PlotNo.31,Additional Circle 10(1)

Patalganga, M.I.D.C. Vs. New Delhi Industrial Area, Taluka Panvel, Khalapur, Raigad, Maharashtra-410220 PAN-AABCI5684A (Appellant) (Respondent)

Appellant by Shri Ketan Ved, CA Respondent Sh. S.K. Jadhav, CIT-DR by Date of Hearing 06.01.2026 Date of Pronouncement 18.02.2026 ORDER PER YOGESH KUMAR U.S., JM:

This appeal is filed by the Assessee against the Final Assessment Order passed u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (the Act in short) dated

10.09.2024 for Assessment Year 2021-22.

2. The grounds of Appeal are as under:-

“On the facts and circumstances of the case and in law, the Appellant craves to prefer an appeal against an order dated 10 September 2024 passed by the Assessment Unit, Income Tax Department (hereinafter referred to as 'Ld. AO') under section 143(3) r.w.s 144C(13) and 144B of the Income-tax Act, 1961 ('the Act') in pursuance to the directions dated 23 August 2024 issued by the Hon'ble Dispute Resolution Panel ('DRP') u/s

144C(5) of the Act, on the grounds set out herein:

1. Ground No.1 - Transfer Pricing ('TP') adjustment amounting to INR 12,44,40,596 in respect of the international transaction pertaining to purchase of raw material.

1.1 That on the facts and circumstances of the case and in law, the Learned TP Officer ('Ld. TPO') has erred in making and the Ld. AO/ DRP have erred in upholding the TP adjustment of INR 12,44,40,596 in respect of the international transaction pertaining to 'purchase of raw material'

alleging that the same is not at arm's length.

1.2 That on the facts and circumstances of the case and in law, the Ld. TPO erred in disregarding the economic analysis conducted by the Appellant to determine the arm's length price ('ALP') in relation to international transaction relating to 'purchase of raw material', thereby making arı adjustment of INR 12,44,40,596.

1.3 That on the facts and circumstances of the case and in law, the Hon'ble DRP erred in rejecting the additional comparable companies 'Iftex Oil and Chemicals Ltd. and 'Universal Petro-Chemicals Ltd.' proposed to be included by the Appellant, without appreciating that additional comparable companies included by the Ed. TPO in final set were also introduced arbitrarily.

1.3.1 On the facts and circumstances of the case and in law, the Hon'ble DRP also erred in rejecting the additional comparable companies 'Iftex Oil and Chemicals Ltd. and 'Universal Petro-Chemicals Ltd. proposed to be included by the Appellant, by randomly applying new turnover filter which has not been applied in the case of the Appellant.

1.3.2 On the facts and circumstances of the case and in law, the Hon'ble DRP also erred in rejecting the additional comparable company 'Iftex Oil and Chemicals Ltd. proposed to be included by the Appellant, alleging the same to be a persistent loss-making company being contrary to the facts on record

1.4 That on the facts and circumstances of the case and in law, while making the aforesaid TP adjustment, the Ld. TPO erred in adopting the following approach:

1.4.1 Erroneously rejecting functionally comparable company - "GP Petroleums Ltd. selected by the Appellant in its TP Study.

1.4.2 Arbitrarily selecting two companies namely, Pratap Tex-Chem Pvt. Ltd. and Quaker Chemical India Pvt. Ltd.' as comparables for determination of arm's length price.

1.4.3 Not granting capacity utilization adjustment to the Appellant, for the purpose of calculation of operating profit margin relating to 'manufacturing segment'.

Other grounds:

2. Ground No. 2: That on the facts and circumstances of the case and in law, the Ld. AO has erred in not granting appropriate credit under section

115JAA of the Act.

3. Ground No. 3: That on