2013 (7) TMI 691

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....cumstances of the case, the ld.CIT(A) has erred in deleting the addition of Rs.13,50,000/- made by the A.O. on a/c of adjustment in respect of arm's length price. 3. The appellant craves leave to add, amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." 3. The facts of the case are that Sahara TV Ltd., Mauritius (for short STVM) is an associate enterprise of the assessee company. The assessee company had exported television software and rights of Hindi feature films. The television software export price was determined at markup of 15% over the cost whereas the exhibition rights of the Hindi feature films were determined by adding up 10% markup of the cost of such rights. The TPO benchmarked the....

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....te ownership of such software was transferred while in the case of Hindi feature films, there was a limited right of the exhibition of such feature films for a limited number of times, that too, within a limited period. That the efforts made by the assessee in respect of manufacturing/acquisition of television software was much more than the efforts involved in acquisition of exhibition rights of Hindi feature films. Moreover, there was also variation in the exhibition rights of the television software and feature films. In view of the above, similar markup could not have been applied for both. That the markup of 10% applied in respect of feature films is reasonable because the assessee has simply acquired the feature films from others and ....

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....re available in any of the databases or in public domain. Therefore, the appellant could only rely on the agreements entered into with third party feature film producers. As the TPO has not got any comparable instances on record to dispute the claim of the assessee and also for the reason that the two rights compared by the TPO are qualitatively different rights, I hold that TPO was not justified in holding that the markup on the third party feature film right should have been 15%. In view of this, TPO/AO is directed to delete the addition made in this regard." 7. After considering the arguments of both the sides and the facts of the case, we entirely agree with the above reasoning of the learned CIT(A). Moreover, the effort put in by the ....