2012 (11) TMI 554

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....principle of natural justice and levy of interest under section 234B. In addition, the assessee vide letter dated 29.3.2012 also filed additional ground before the Tribunal in which the TNMM method followed by AO for computing transfer pricing adjustment was challenged. Thereafter the assessee again filed a letter dated 7.5.2012 raising another additional ground regarding computation of transfer pricing adjustment by AO in relation to the total purchases instead of considering only purchases from associate enterprises. 2. At the time of hearing of the appeal before the Tribunal, the ld. AR for the assessee did not press any of the grounds raised in the memorandum of appeal. The additional ground raised vide letter dated 29.3.2012 was als....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....own study of prowess database for identification of comparables and selected eight comparables which gave an average margin of 4.8%. Based on the order of TPO, the AO prepared a draft order for making the transfer pricing adjustment to which assessee filed before the Dispute Resolution Panel (DRP). The DRP after hearing the objections of the assessee, directed the TPO to include three more comparable for computing transfer pricing adjustment as mentioned below:- (i)  Balmer Lawrie & Co. Ltd. (ii)  Gulf Oil Corporation Ltd. (iii)  Valcoline Cummins 3.1 The AO, therefore, computed transfer pricing adjustment based on 11 variables including three suggested by DRP which gave an average profit margin of 4.22% as per....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s in appeal before the Tribunal. 4. Before us, the ld. AR submitted that the assessee was not raising any dispute either in the matter of the selection of comparables used by the AO on the direction of DRP for the purpose of transfer pricing study or about TNMM method used for this purpose by the AO. The limited dispute was whether the AO was justified in computing the adjustment with reference to gross sales of Rs.109.04 crores when the total purchases from associate enterprises were only to the tune of Rs.15.81 crores. It was argued that the adjustment had to be made only with respect to transactions with respect to associate enterprises. Reliance for the said proposition was placed on the decision of Pune Bench of the Tribunal in the ....