TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 1410
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....r company after having discussed in the showcase notice. 4. For these and other grounds that may be urged at the time of hearing, it is prayed that the directions of the Dispute Resolution Panel in so far as it relates to the above grounds may be reversed. 5. The appellant craves leave to add, alter, amend and / or delete any of the grounds mentioned above. Grounds 1, 4 and 5 are general needing no adjudication. 02. Ld. Counsel for the assessee at the outset submitted that issue regarding most appropriate method for evaluating the pricing of international transactions of the assessee, which appears in ground 2 of the Revenue had come up before this Tribunal in assessee's own case for A. Y. 2008-09. Placing a copy of the order dt.17.10.2014 in ITA No.1022/Bang/2012, Ld. AR submitted that this Tribunal held Resale Price Method ('RPM' in short) as the best in the circumstances of the business of the assessee and had remitted the issue of analysing the international transactions back to the file of the AO / TPO. 03. Per contra, Ld. DR submitted that AO had pursuant to the DRP directions, instead of correctly following such directions, simply deleted the adjustments recommended b....
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....LI). As per the assessee re-sale price method was most appropriate method for evaluating the value of imports. Assessee relied on Rule 10B(1)(b)of the IT Rules. As per the assessee RPM was applicable in a situation where property or services were purchased from an associated enterprise were re-sold as such to an unrelated enterprise. Assessee after a search of various comparable candidates zeroed in on five companies as proper comparables. The result of three years of these companies viz..for years ended, 30-03-2006,31-03-2007 and 31-08-2008 were considered and weighted average margin of such comparables were worked out at 11.49%. Since the assessee had margin on sale of 8.37%, as per the assessee it was well within plus or minus 5 % of the arm's length margin of 11.49%. Thus, as per the assessee there was no requirement of any adjustment for pricing of imported goods. 12. The TPO when the matter regarding fixation of ALP of international transactions were referred to him, proposed to reject the RPM adopted by the assessee. As per the TPO, the TNM method was most appropriate since it operated in a manner similar to cost plus as well as re-sale methods. Further, as per the TPO whe....
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....ases and sale from unrelated enterprises also, and was not solely doing the business of importing goods from associated enterprises and selling it in the local market. As per the learned AR, assessee was a trader simplicitier. It had analysed 612 companies which were importing consumer durables for re-sale and out of that selected 5 companies as proper comparables, while working out the ALP. The TPO had rejected the TP documentation for vague reasons. When assessee was buying and selling goods the best method as per the learned AR was RPM. Assessee was receiving finished goods from the associated enterprises and selling it, acting as a full fledged distributor of the associated enterprise. When the property or services purchased from the associated enterprises was re-sold to an unrelated party without any value addition, as per the learned AR, RPM was the best method. Reliance was placed on the decision of Mumbai Bench of this Tribunal in the case of ITO Vs M/s L'oreal India Pvt.Ltd.,(ITA No.5423/Mum/2009 dated 25-04-2012), M/s Star Diamond Group Vs DDIT (ITA No.3923/Mum/2008 dated 28-01-2011 that of coordinate bench of this Tribunal in the case of M/s Textronix India Pvt. Ltd., Vs....
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....R also supported the method considered by TPO and referred to para 2.29 of OECD guidelines 2010 as stated herein above. On the other hand, ld.AR justified the RPM method adopted by it and also referred to order of TPO in the preceding assessment years as well as succeeding assessment years to the assessment year under consideration to substantiate that RPM is the most appropriate method to determine ALP. He submitted that the assessee made adjustment for making and selling expenses to the profits to make it comparable to the comparable companies profits. We agree with ld.CIT(A) that there is no order of priority of methods to determine ALP. RPM is one of the standard method and OECD guidelines also states that in case of distribution and marketing activities when the goods are purchased from AEs which are sold to unrelated parties, RPM is the most appropriate method. In the case before us, there is no dispute to the fact that the assessee buys products from its AEs and sells to unrelated parties without any further processing. Further, the assessee has also produced certificates from its AEs that margin earned by AEs on supplies to the assessee is 2% to 4% or even less. The departm....
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....We have considered the rival submissions. The dispute is with regard to the ALP in respect of international transactions whereby the assessee imports equipments from its AE and re-sells them without any value addition to the India customers. In similar circumstances, Mumbai Bench of the Tribunal in the case of M/s L'Oreal India Pvt.Ltd.,(supra) has taken the view that the RPM would be the most appropriate method for determining the ALP. The Mumbai Bench of the Tribunal, in this regard, has referred to the OECD guidelines wherein a view has been expressed that RPM would be the best method when a re-sale takes place without any value addition to a product. In the present case, the assessee buys products from the AE and sells it without any value addition to the Indian customers. In such circumstances, we are of the view that the ratio laid down y the Mumbai Bench of this Tribunal in the se of M/s L'Oreal India Pvt.Ltd., (supra), would be squarely applicable to the facts of the assessee's case". 19. The only discernable reason why the TPO has rejected the re-sale method adopted by the assessee to our eyes is that assessee had given multiple year data of comparables. The data given b....