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TaxTMI 
TaxTMI 
TaxTMI 
2014 (8) TMI 242
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....LI under TNMM, like rejection of assessee's documentation, adoption of TNMM against cost plus and re-sale method, adoption of multiple year data etc., were not pressed. Accordingly, grounds No. 2 to 8 are treated as withdrawn. 2.1. The main grounds are with reference to the TP adjustments made by the A.O. consequent to the TPO order which DRP has confirmed. 3. Briefly stated, assessee company is engaged in the business of manufacturing and selling and distribution of branded edible oils, food products, bulk commodities etc., It filed its return of income on 30.09.2009 declaring total income of Rs. 12,75,95,829. As assessee has international transactions with its AE, Assessee has filed the necessary T.P. documentation and has selected 17 c....
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.... study, the TPO noted the operating Revenues as under: 3.1. The international transactions reported by assessee as per 3CEB report for the F.Y. 2009-10 as under :- 3.2. The TPO after analyzing the various comparable companies selected by assessee analysed each of the company and ultimately, selected only 3 companies as comparable in its branded food category which are as under :- 3.3. Thereafter, as assessee OP/OC is only 4.81% as against 13.15% arrived at by the TPO he has proposed adjustment of Rs. 2,78,35,481/- to the income returned as excess payment treated as adjustment under section 92CA. 3.4. Assessee raised objections before the DRP with reference to working of segmental profits, rejection of assessee's T.P. study and also reje....
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....zen food etc., Assessee submits that the Ld. TPO has ignored the fact that assessee is engaged in the ready to eat snack food which is akin to the business carried on by MTR. The Ld. TPO has selected ADF Food Limited (ADF) and Tasty Bite as comparables which are into the same functional profile of MTR. 3. Shivdeep Industries Limited (Shivdeep) : Assessee submits that Shivdeep is manufacturer and exporter of Bhujiya, Namkeen, Sweets, Papad, Sohan Papri and Rasgulla. The extracts from the Shivdeep's website exhibits the products which are manufactured and sold in a packaged state whicha re ready to use/consumed. The product profile of the company is similar o the comparables accepted by Ld. TPO and to that of assessee. Ld. TPO also rejected....
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....ing "income" as operational income while determining the mark-up of 9.18% for Tasty Bites: a) Income from Cold storage rentals, and b) Income from processing charges. No appropriate reason was provided by Ld. Panel and merely stated that "it hardly will have any impact on the margin". 5. In the light of the above, Ld. Counsel submitted that mark-up in the case of Tasty Bites Eatables Ltd., has to be corrected and four comparables which are on similar lines should be included. 5.1. Learned D.R. relied on the orders of the TPO to submit that these companies are excluded because they are not in similar line of business. 6. We have considered the rival contentions. On perusal of the TPO order in the FAR analysis, it is clearly stated that....
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....opinion that these four companies also should be included in comparability analysis. Infact, TPO was selective in selecting some and rejecting some which are in similar line of business. With reference to the Tasty Bite Eatables Ltd., which is also in the business of manufacturing and marketing, the TPO included that as functionally similar but according to assessee, computed the margin wrongly. This requires re- examination by the TPO as TPO himself has given a finding that tax payer has included income from cold storage as operating income vide para 16 of the order under item No.3. He has opined that operating income should be excluded and manufacturing of snacks and operation of cold storage cannot be even considered to be closely relate....