AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 1161
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....nt confirming order of CIT(A) which has modified the order of AO. 3. This Court admitting the appeal on 11.01.2017, framed the following substantial questions of law:- Income Tax Appeal No.71/2015 "(i) Whether the Tribunal was legally justified in deleting the addition of Rs. 1,02,91,000/- made on account of adjustment of the Arm's Length Price of the international transaction on payment of royalty by assessee to its Associated Enterprise, from the income of the assessee u/s 92C? (ii) Whether the Tribunal was legally justified in holding the working of operating margin at 5.18% as against 7.85% made by the TPO and also holding the non-applicability of the CUP method without any justification and reasons?" Income Tax Appeal No.128/201....
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....entioned earlier, the comparable companies whose contemporary data was available have been taken in the fresh analysis as it best describes the economic scenario and identical market condition. Hence, the margin of this company is not considered for benchmarking the margins of the assessee. (2) Atul Ltd.: This company was proposed to be rejected on the ground of significant related party transactions, as the financial information would not be considering as reasonable representing financial results of the uncontrolled transactions. The assessee claimed that it had adopted the rejection criteria of filtering out companies which had related party transactions in excess of 25%. As per the figures available with the assessee, this company h....
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..... However a search on CMIE (Prowess) database revealed that 2 companies had not been included in the list of comparables. While M/s Indian Toners & Developers Ltd. had been taken out by the assessee on the basis of non-comparable product', the company M/s Rainbow Ink & Varnish Manufacturing Co. Ltd. had not been identified in the T.P. Study. Accordingly, it had been proposed to include these two companies as comparables. (1) M/s Indian Toners & Developers Ltd: The assessee claimed that this company manufactures toners and developers for photocopies, laser printers and digital printers. The same was not considered by the assessee to be comparable to the printing inks manufactured by Sakata India. However, it is seen that the other compan....
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....f product differences. The assessee has objected to the same by claiming that this company is dealing in dyes intermediates and hence should be considered. It is observed that this company has been taken as a comparable in the manufacturing segment as well, and hence this is considered as a comparable for both segments." 5. The conclusion which has been reached by the AO ought not to have been disturbed by the tribunal and comparison which has been made and amount which has been deducted which reads as under:- "Accordingly, the Arm's Length Price of the import of raw material and spares by the assesssee from its Associated Enterprises is considered at Rs. 6,38,06,451/- as against Rs. 7,83,58,988/- declared in Form 3CEB, after making....
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....4/214 Taxman 492/32 taxmann.com 23 (Bom.). 8. We note that finding of the comparable to be adopted to determine the ALP as the basis of the activity conducted by the respondent-assessee is essentially a finding of fact. The view taken by the Tribunal is a reasonable and possible view. Moreover it has not been shown us to be in any manner perverse. Thus the question as raised does not give rise to any substantial questions of law." 7.1 He has also relied upon the decision of Commissioner of Income Tax-3 vs. Goldman Sachs (India) Securities (P) Ltd. (2016) 290 CTR (Bom) 236 wherein it has been held as under:- 5. (a) We found that during the subject Assessment Year, the Respondent- Assessee was providing services of Broking Services, B....