2016 (4) TMI 803

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....to adopt RPM for working out value of transaction with respect to AEs without appreciating the fact that each year is an independent year and principle of res-judicata are not applicable to income tax proceedings. In view of the fact and circumstances of the tax payer's case, TNMM is the most appropriate method. 2. That the order of the ld. CIT(A)-II, Dehradun is against the spirit of legislature and the order of the Assessing Officer is liable to be resotred. 3. That the appellant craves, leave to add, alter, amend or vary from the above grounds of appeal." 2. Brief facts of the case are as under: The assessee has e-filed its return of income on 29.09.2008 declaring Nil total income by claiming loss of Rs. 71,49,110....

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....ssessee used Resale Price Method(RPM) as the MAM and gross profit as PLI sales. 2.2. The ld.AO therefore made a reference u/s 92CA of the I.T. Act was made to Addl. Director Income Tax, Transfer Pricing Officer, Kanpur (Camp Office Noida) to compute Arm's Length Price(ALP), regarding the international transactions made by the assessee company. The TPO, Noida determined the arm's length price of the international transaction of the assessee relating to cost of goods sold is at Rs. 7,56,53,190/- as against Rs. 11,86,15,849/- shown by the assessee for import of industrial automation products. The ld.TPO rejected the RPM used by the assessee and applied TNMM method for benchmarking the transaction and proposed an adjustment of Rs. 4,29,62,65....

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....e MAM for these transactions as there is no value addition that is made by the assessee. He reiterated his submissions made before the ld.CIT(A) that, RPM is applied where an enterprise purchases from its AE and then resells to an unrelated enterprises. He submitted that there is no valid reasons given by the TPO for rejecting RPM adopted by the assessee. He further submitted that the TPO in the subsequent year being 2009-10 has accepted RPM as MAM for the trading section. Ld.AR supported the findings of the ld.CIT(A). 6. We have perused the orders of the authorities below as well as the arguments advanced by both the parties. 6.1. It is observed that the primary objective of the assessee is of manufacturing/trading/assembling of Tele....