2014 (3) TMI 886

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....ear 2007-08 2. The major issue involved in this appeal is against the making of the addition towards transfer pricing adjustment of Rs. 4,77,77,646/- on account of Arm's Length Price (ALP) of the international transaction of provision of `Sourcing Support Services' provided by the assessee to its Associated Enterprises. 3. Briefly stated the facts of the case are that the assessee is engaged in the business of providing services to its group companies for supply of high volume, time sensitive, and consumer goods. The assessee was compensated with charge for the buying services at cost plus markup of 5%. The assessee reported international transactions to the tune of Rs. 62,78,77,646/- in the nature of `Service fee received&#39....

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.... on PLI of OP/TC. In the like manner, the selection of comparables is also beyond any controversy. The entire point of dispute is against the base of 'Total Cost' in the PLI of Operating Profit/Total Cost. Whereas the assessee computed its OP/TC at 7.56% based on the cost incurred by it as constituting 'Total cost', the TPO changed such base to FOB value of goods exported in the hands of the A.Es. The short question before us is about determination of the correct base in the PLI. 5. It has been brought to our notice that that the TPO in the preceding year also applied the same base of 'total cost' as in the year under consideration, which got the approval from the Tribunal. The assessee assailed the Tribunal order....

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....tion of ALP with the correct base of the assessee as well as comparables are not readily available on record, we consider it expedient to set aside the impugned order and remit the matter to the file of AO/TPO for a fresh determination of ALP with the correct cost base of the 'total cost' incurred by the assessee in line with the above judgment of the Hon'ble Jurisdictional High Court in the assessee's own case. 7. The next ground in this appeal is against allowing of depreciation of computer peripherals @ 15% as against 60% claimed by the assessee. The Assessing Officer made disallowance of Rs. 9,20,701/- on account of depreciation of computer peripherals by reducing the rate of depreciation to 15% as against 60% claimed....