2017 (7) TMI 352

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....13. 2. The assessee has raised the following grounds for our adjudication. 1. For that the order of the Learned Assessing Officer and the direction of the Dispute Resolution Panel is contrary to law, facts and circumstances of the case. 2. For that the Learned Transfer Pricing Officer and Dispute Resolution Panel have erred in rejecting CUP as the Most Appropriate method in respect of the transaction involving purchase of raw materials and freight charges from Associated Enterprises even after it was brought to the notice of Transfer Pricing Officer and Dispute Resolution Panel that no mark-up has been charged by the Associated Enterprises. 3. For that the Learned Transfer Pricing Officer and Dispute Resolution....

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....d by the Transfer pricing Officer ought to be rejected. 8. For that the Dispute Resolution Panel erred in directing the Assessing Officer to disallowance the interest paid on delayed remittance of TDS amounting to Rs. 2,50,495/-, which is not the subject matter of this Assessment Year. 2.1 At the time of hearing, the ld.A.R filed additional grounds as follows:- 10. The Learned Transfer Pricing Officer and Dispute Resolution Panel have erred in not excluding the liquidated damages from operating costs for the purpose of determination of Profit Level Indicator (PLI) of the appellant. 11. The Learned Transfer Pricing Officer and Dispute Resolution Panel have erred in arriving at the PLI of the comparable company (....

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....th reference to the purchase made by the assessee from AE. He also drew our attention to the reply filed by the assessee before the TPO vide letter dated 17.08.2015 where the assessee replied as follows:- i) List of purchases - Details of party wise purchases along with brief descriptions attached herewith. ii) Purchases from A.E - During the F.Y 2011-12 total of material purchased from A.E was of Rs. 286,289,140.43. All the copies of invoices are attached herewith. As well back to back invoice copies also attached herewith. iii) Note on pricing policies from A.E: All sales made b;y the AE were on back-back basis as per copies attached. iv) Services provided to AEs -During F.Y 2011-12, total of services p....

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....though billing was done in name of Ae. This is normal practice in such transactions that the person placing the order (in present case AE) gets discount or commission by way of credit notes from the vendors and at the same time such person is able to get the material directly delivered to its own customer (assessee in present case) without disclosing the correct price or by just disclosing the invoiced price without any details of trade discounts/commission etc. Considering the above there is merit in the action of the TPO in not accepting the CUP method as adopted by the assessee." According to the ld.A.R, there is no basis for rejecting the CUP Method and it should be followed as the most appropriate method while making TP adjustments.....