2015 (5) TMI 436

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.... in the assessee's case - originally leading to adjustments to the tune of Rs. 88,40,13,476/-, is in consonance with the provisions of the Act. 2. Briefly the facts are that the assessee is inter alia engaged in facilitating the import and export activities both directly and indirectly on behalf of various customers - domestic and overseas. It has two distinct business segments i.e. commission business derived on FOB value sold/purchased by the customers, and secondly trading activities undertaken by it. For the concerned AY it reported an income of Rs. 19.43 crores part. The matter was referred to the TPO who after considering the report, directed adjustment of Rs. 88,40,13,476/-. This was accepted by the AO. The TPO - (1) did not accept ....

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....r commercial as well as trading business - separately. This was complied with. The transactions with the AEs under the trading segment was at 3.9% and that from non-AE transactions was at 5.82% (in the trading segment). This data was not disputed. The ITAT recorded its disapproval at the approach adopted by the AO; firstly disturbing the consistent application of TNMM method, and more importantly in adopting the profit of one segment of the business i.e. the trading transactions, and comply it to, what according to him was a dissimilar segment i.e. the commission income. The ITAT noticed that the percentage of commission from AE transactions for the concerned AY was reported on 1.83% as against 2.86% from non-AEs. The ITAT has held as follo....

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....ns should be compared with the commission percentage from non-AE transactions. That is how, it was directed that such commission percentage at 2.26% from non-AE transactions should be taken as arm's length rate at which the assessee should have earned commission from AE transactions. Similar view was taken by the Tribunal in its order for the AY 2008-09 in which the commission percentage @ 2.23% from non-AE transactions was held to be arm's length rate of commission to be applied in respect of transactions with AEs. As the facts and circumstances of the instant year are admittedly similar to those of two preceding years, respectfully following the precedents, we hold that the action of the TPO/AO in determining the ALP in respect of....

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....entical facts has taken a particular view in assessee's own cases for the immediately two preceding assessment years, we cannot tinker with the same. We, therefore, hold that the commission percentage on the basis of FOB value of goods from transactions with non-AEs be computed and taken as arm's length rate of commission for the purposes of the transactions with AEs under the 'Indenting business' segment. In this regard, the ld. AR submitted that the percentage of commission from AE transactions for the instant year stood at 1.83% as against 2.86% from non-AEs. We find that the rates of commission now sought to be placed before us, are not emanating from the orders of the authorities below. Under such circumstances, we set ....