TaxTMI 
TaxTMI 
2015 (6) TMI 927
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....rnal TNMM analysis was carried and international transactions were considered to be at Arm's Length. The Transfer Pricing Officer (TPO) rejected the internal bench marking carried out by the assessee since the segmentation of its accounts was artificially created by the assessee for the purpose of transfer pricing. As per the TPO assessee does not maintain any reliable segmental data. 2.1 The TPO has taken OP/Sales as Profit Level Indicator (PLI) and selected three companies, namely MJs. Casil Health Products Ltd., Organon (India) Ltd. and Span Diagnostics Ltd., as comparable companies. While doing so the TPO has taken the segmental of the comparable companies wherever it was available. The assessee has objected to the selection of t....
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....n in annual audited account is based at entity level; (b) the audited financials of the assessee do not contain information about AE and non AE revenue separately; (c) the allocation of expenditure to the AE and non AE segment is not available in audited financials of the assessee; (d) the allocation of expenditure on the basis of turnover cannot be made because as per terms and conditions of the agreement between the assessee and the AE, the assessee was required to incur expenditure on discounts, marketing, maintenance and after sale services and was required to main prescribed infrastructure for reporting and sales administration. Accordingly, these AE specific expenditure cannot be allocated on the basis of turnover. ( e) in suppor....
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....tivities. 7.1 That the assessing officer erred on facts and in law in considering Casil Health Products Ltd., Organon (India) Ltd and Span Diagnostics Ltd. as comparable companies for undertaking the benchmarking analysis applying TNMM. 7.2 That the assessing officer erred on facts and in law in taking the operating profit margin of 4.26% of Casil Health Products Ltd. at entity wide level disregarding the loss of 13.31% from the "diagnostic product segment" available in the audited financial statements of the Casil Health Products Ltd., merely on the ground that certain expenses net of unallocated income aggregating to Rs. 52,626 were not allocated. 7.3 That the assessing officer erred on facts and in law in not appreciating that in case....
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....8 Without prejudice, that the assessing officer erred on facts and in law in considering the combined net operating profit margin of M/s. Casil Health Products Limited for applying TNMM instead of considering only net operating profit margin of the diagnostic products segment of the said company. 7.9 Without prejudice, that the assessing officer erred on facts and in law in not appreciating that the gross profit margin earned by the appellant from the international transactions of trading / resale of diagnostic products at 31.32% was higher than the average gross profit margin of 19.95% earned by the comparable companies identified by the Transfer Pricing Officer and, therefore, no adjustment on account of arm's length price of interna....