AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 438
X X X X Extracts X X X X
X X X X Extracts X X X X
....-2009 declaring total loss of Rs. 2,08,66,575/-. Subsequently, the assessee filed a revised return on 01-10-2010 declaring total income of NIL. 3. The AO made a reference u/s.92CA(1) of the I.T. Act in the case of the assessee to the TPO for computation of the ALP in relation to the international transactions. The AO also forwarded a copy of the distribution agreement dated 25-05-2012 between a concern called Terex GB Ltd. with registered office at Coalisland Road, Dungannon, BT71 4DR, Northern Ireland. The TPO accordingly issued a detailed questionnaire to the assessee asking him to file the details/explanations with regard to the computation of the ALP. 4. From the various details furnished by the assessee, the TPO noted that the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt of Rs. 30.33 crores from FHOL as compared to the total purchase of Rs. 31.83 cores. 6. From the details furnished by the assessee during the TP assessment proceedings, he noted that out of the purchases of Rs. 29.82 crores the assessee had purchased/imported equipments and goods worth Rs. 28.46 crores. This works out to 95.43% which is a substantial portion of the purchases from a single party. The TPO accordingly held that the assessee is the Associate Enterprise of the Terex Corporation in the current TP audit. 7. The assessee approached the DRP. It was submitted that the contention of the TPO is not correct. The assessee company and Terex GB Limited are independent entities. They have entered into contract for the distribution of go....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted was not influencing the business decisions of the assessee and hence assessee company is not AE of Terex GB Limited. 9. The assessee analysed the provision of 92A(2)(i) and argued that the said clause is attracted only in the cases in which, the goods manufactured by one entity are sold to the 'other entity' and the prices and other conditions relating thereto are influenced by 'such other entity i.e. the party, which purchases the goods from the manufacturing entity. The section is applicable only in cases where the party purchasing the goods influences the conditions and not in cases where the manufacturing entity influences the prices and other conditions. 10. The assessee without prejudice to the above submission submi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the goods or articles manufactured or processed by one enterprise, are sold to the other enterprise or to persons specified by the other enterprise, and the prices and other conditions relating thereto are influenced by such other enterprise. 2.2.9 The reading of clause (i) makes it clear that the clause refers to the goods manufactured or processed by one enterprise (Terex GB Limited) and sold to other enterprise (the assessee) and prices and other conditions relating thereto are influenced by such other enterprise (the assessee). Therefore, in order to consider the Terex GB Limited' as the assessee's AE, the assessee should purchase goods or articles manufactured by Terex GB Limited and also influence 'prices and other condit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct in law and facts in holding that the transfer pricing provisions will not be applicable to the Assessee by holding that Terex GB Limited is not the Associated Enterprise of the Assessee even when more than 95% of the total purchases were made from Associate Enterprise. 2. Whether Hon'ble DRP was correct in law and facts in holding that Assessee is not covered u/s 92A(2) of the I.T. Act,1961." 13. The Ld. Departmental Representative heavily relied on the order of the TPO. 14. The Ld. Counsel for the assessee on the other hand while supporting the order of the DRP drew the attention of the Bench to page 83 of the paper book which gives the details of shareholding pattern. Referring to the said chart he submitted that the entire shar....