TaxTMI 
TaxTMI 
2014 (7) TMI 948
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....e assailed before us is against the addition of Rs. 88,40,13,476/- made by the AO on account of transfer pricing adjustment. 3. Briefly stated, the facts of the case are that the assessee, established in India, is a subsidiary company of Sumitomo Corporation, Japan (SCJ) holding 99.99% of assessee's share capital with the remaining 0.01% held by Sumitomo Corporation Singapore Pte Ltd. SCJ is the ultimate parent company of Sumitomo group which is one of the largest trading companies of sogo shosha in Japan. Sogo shosha is an integrated business enterprise with the fundamental role of facilitating trade between buyers' and sellers' market across the globe. SCJ and its other group companies situated in different countries undertook trading ....
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....at of the comparables, again using three years' data, computed at 1.08%. The TPO required the assessee to furnish segment-wise results of commission business as well as trading business separately. The assessee furnished the same showing GP/OC from transactions with the Associated enterprises (AEs) under the 'Trading segment' at 3.29% and that from non-AE transactions under the same segment at 5.28%. The TPO held that the assessee was not justified in using multiple year data and also clubbing of the international transactions of Indenting and Trading business under one segment and then applying TNMM. He also held that the Profit level indicator (PLI) as employed by the assessee, being the Berry ratio (GP/OC), was alien to the transfer pric....
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.... that the facts and circumstances of the instant year are mutatis mutandis similar to those of the preceding two years. The appeal of the assessee for the AY 2007- 08, in which transfer pricing adjustment was made under similar circumstances, came up for consideration before the Tribunal in ITA No.5095/Del/2011. Vide order dated 31.01.13, the Tribunal has held that the 'Indenting transactions' are different from 'Trading transactions' in terms of functional differences, risks undertaken and assets employed, and hence both cannot be considered as uniform. The Tribunal held that the commission earned by the assessee from its AEs under the 'Indenting segment' was required to be benchmarked on the basis of commission earned by the assessee from....
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....ctions under the 'Indenting business' and the addition on account of transfer pricing adjustment, if any, should be made in consonance with the view taken by the tribunal in the immediately two preceding years. 6. The ld. AR tried in vain to impress upon us that the view taken by the tribunal in the preceding two years should not be followed and the application of TNMM as employed by the assessee should be accepted leading to no addition on account of TP adjustment. To buttress his contention for the application of TNMM, he placed on record a copy of the order passed by the Delhi bench of the tribunal in Marubeni India P. Ltd. VS. DCIT (ITA no. 5397/Del/2912). This contention was countered by the ld. DR by stating that the TPO has applie....