TaxTMI 
TaxTMI 
2009 (11) TMI 918
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....he company with the associated enterprises. 3. In this case, during the year under consideration the assessee company entered into the following international transactions with its associated enterprises as reported in the Form3CB. S.No. International Transaction Method Value in Rs. 1. Provision of Representative and Marketing TNMM 6,19,26,399/- 2. Reimbursement of Mobile phone expenses by Toshiba Japan Not bench marked 70,963/- 3.1 The AO asked the company to produce its transfer pricing documentation on the basis of which it had justified its arms length price. 3.2 The assessee responded with the documents which showed that it had declared the net margin of 15.97% on the service charges received from Toshiba Japan. The asse....
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.... the AO. The AO while rejecting the operating margins declared by the appellant has not utilized the full data provided by the applicant for making the comparison. He has considered only the few companies for comparison which had shown better results. In an arbitrary manner, he has made an adjustment of 5% in the operating margin declared by the appellant and in consequence has made an addition of Rs. 30,96,320/-. I do not find any merit in the 5% adjustments made by the AO in the operating margins. He has not given any reasons for such arbitrary adjustment. The operating margins shown by the appellant are therefore accepted. The addition made by the AO to the tune of Rs. 30,96,320/- is therefore deleted." 5. Against this order the assesse....
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....O has erred in fact by concluding that average mean of these four PSUs are greater than of the assessee. The average mean of the 4 companies selected by the AO with 13.62% which is lower than the operating margin of independent company and the operating margin was 15.97%. Hence, it was contended that the AO has not provided any reasonable ground in accordance with section 92(3) for disregarding the analysis undertaken by the assessee. It has further been contended that benefit of provisio of section 92(c) was not provided to the assessee. Ld. Counsel of the assessee further placed reliance upon decision of ITAT, 'H' Bench in Mentor Graphics (Noida) (P). Ltd. v. Dy. CIT [2007] 109 ITD 101 (Delhi) 6.1. Ld. DR placed reliance upon the....