IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA SHRI PRADIP KUAMR CHOUBEY, JUDICIAL MEMBER SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER (Assessment Year 2020-2021)

DIC Fine Chemicals Private Limited, UB-03, Mani Tower, 31/41, Binova Bhave Road, Sahapur, Kolkata - 700038 [PAN: AACCD6812G] ……..…...…………….... Appellant vs.

DCIT, Circle 11(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata - 700069 ................................ Respondent Appearances by:

Assessee represented by : Akkal Dudhewala, AR Department represented by : Praveen Kishore, CIT (DR)

Date of concluding the hearing : 16.06.2025 Date of pronouncing the order : 23.06.2025

O R D E R

PER SANJAY AWASTHI, ACCOUNTANT MEMBER

1. The present appeal arises from order u/s 143(3), r.w.s. 144C(13), r.w.s. 144B of the Income Tax Act, 1961 (hereafter “the Act”). In this case, the assessee purchased raw material from certain Associated Enterprises (AEs) and also from some third parties. The finished product is seen to have been sold to the assessee’s group concerns. As per the Transfer Pricing (TP) documents furnished for the AY 2020-21, the assessee was seen to have entered into certain international transactions with AEs. The Transfer Pricing Officer made an upward adjustment of Rs. 6,12,63,123/-. In the body of the Ld. AO’s order, it is seen that an addition of Rs. 8,04,08,359/-

has also been made u/s 69 of the Act.

1.1 Aggrieved with these actions, the present appeal has been filed with the following grounds:

“1. For that on the facts and circumstances of the case and in law, the final assessment order passed u/s 143(3) r.w.s 144C(13) of the Act on 26.07.2024 was barred by limitation in as much the time limit for passing of the final assessment order as provided u/s 153 of the Act was 30.09.2023 and in that view of the matter, the assessment order being bad in law ought to be quashed.

2. Corporate Tax Grounds: [Tax Effect-Rs. 5,01,74,816/-]

2.1. For that on the facts and in the circumstances of the case and in law, the NFAC grossly erred in making erroneous addition of Rs.8,04,08,359/- u/s 69A of the Act which neither formed part of the draft assessment order issued u/s 144C(1) dated 14.09.2023 nor the directions issued by the Ld. DRP in as much as no reasons were set out by the NFAC for making the impugned addition in the impugned assessment order as well.

2.2. For that on the facts and in the circumstances of the case and in law, the addition of Rs.8,04,08,359/- made u/s 69A of the Act being ex-facie erroneous and a mistake apparent from record deserves to be deleted in full.

3. Transfer Pricing Grounds [Tax Effect-Rs. 1,59,28,412/-]

3.1. For that on the facts and in the circumstances of the case and in law, the transfer pricing adjustment of Rs.6,12,63,123/- made by the TPO was unjustified on facts & in law and the same deserves to be deleted in full.

3.2. For that on the facts and in the circumstances of the case and in law, the Ld. DRP erred in confirming the TPO's action of rejecting the economic analysis conducted by the appellant and upholding the purported search process, filters and elimination matrix of the TPO which was fraught with infirmities.

3.3. For that on the facts and in the circumstances of the case and in law, the TPO as well the Ld. DRP erred in law and on facts in not accepting the economic and functional analysis conducted by the appellant and the comparables identified by the appellant; and instead including companies which were functionally different, alleging the same to be 'comparable' to the appellant.

3.4. For that on the facts and in the circumstances of the case and in law, the Ld. DRP was unjustified in upholding the erroneous operating margins of the comparables computed by the TPO and also failed to make suitable adjustments to account for differences in the risk profile of the appellant vis-à-vis the comparables. 3.5. For that on the facts and in the circumstances of the case and in law, the Ld. DRP erred in rejecting the PLI adopted by the