TaxTMI 
TaxTMI 
2014 (12) TMI 925
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....ss of importing, marketing and distributing orthopaedic implant and instruments to customers in India through direct sales and also through a dealer net work. The international transactions undertaken by the assessee company in Transfer Pricing documentation for the FY 2008-09 is summarised below. Table1 : International transactions undertaken by the appellant S.No. Nature of transaction Amount (INR crores) Method Applied Class - I transactions 1. Purchase of Hip, Knee, Trauma implants 35.97 Primary Method Transaction Net Margin Method (TNMM) 2. Purchase of Instruments 10.86 3. Purchase of catalogues 0.07 4. Purcha....
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....PO considered some of the comparables selected by the appellant and rejected the others. The comparables selected by the appellant in the TP study have been dealt during the TP assessment proceedings as under. Table 4: Comparables selected by appellant and rejected by the TOP S.No. TP Study comparables Show cause notice (Page 200 and 201 of the paper book) APPELLANT'S REPLY TO Show Cause Notice (page 133 and 134 of the paper book) Final TP order (page 77 of Appeal Memorandum) 1. Abott India Ltd. 3.1% 3.58% 3.58% 2. Aditya Medisales Ltd. 0.80% 0.29% 0.29% 3. Genetic Laboratories Ltd. - Rejected 4. Hicks Thermometers (India Ltd) 1.68%....
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....ve" Advertising, Marketing and Promotion (,AMP') expenses from its Associated Enterprises ('AEs') and in doing so have grossly erred by: 1.1 misinterpreting or placing incorrect reliance on the international guidance in relation to the 'marketing intangibles' and 'bright line test' from Organisation for Economic Co-operation and Development ('OECD'), US TP Regulations and Australian Tax Office ('ATO') and relying on several erroneous/factually incorrect and contradictory statements/ observations in the TP order, which are not relevant to the instant case, only in order to justify an otherwise inappropriate and unwarranted TP adjustment; 1.2 incorrectly holding the AMP expenses incurred by the appellant to be "excessive" on the basis o....
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.... not controverting or even taking cognizance of itemized details of expenses amounting to Rs. 2.19 crores booked under the head sponsorship and sales promotion expenses presented before the Ld. DRP as additional evidence which clearly set forth that these expenses were incurred by appellant on various events organized i.e. conferences, cadaver workshops, camps for creating awareness on orthopaedic problems, educating surgeons and community at large on the usage of implants and thus had no nexus with brand promotion. 1.7 ignoring that the facts and circumstances of the appellant's case during the year under consideration remain unchanged from those during the earlier years, for which the appellant's international transactions were found t....
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....32) d) AMP is not an international transaction : e) Misinterpretation or placing incorrect reliance on the international guidance on marketing intangibles - OECD transfer pricing guidelines 2010 UN Manual and the Australian Tax Office (ATO) Guidelines (ground 1 read with sub ground 1.1) (Refer page 140 of paper book) f) No adverse inference in previous years (ground 1 read with sub ground 1.7) g) erroneous adhoc mark up of 12.75% on alleged excessive AMP expenditure (ground 1 read with sub ground 1.3) h) Bright Line is a tool not a method (ground 1 read with sub ground 1.5). 7.1. Both the parties admit that the DRP has in a very cursory manner passed its order. While noting that the facts in this case are similar to the case ....