2020 (12) TMI 87

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....il 2017 of the learned ITAT 'D' Bench Chennai, by which the learned Tribunal partly allowed the Appeals of the Assessee for statistical purposes and decided certain issues with regard to Transfer Pricing Adjustments in the case on hand. 2. The purported substantial questions of law raised by the Assessee in the present Appeal as given in the Memorandum of Appeal are quoted below:- "i) Whether the ITAT was justified in holding that Berry Ratio is the MAM for computation of ALP, when the Appellant as a trader of UPS, sells the same without any value addition? ii) Whether the impugned order of the ITAT is perverse on account of mutually exclusive findings in para 5 and 6 of the impugned order? iii) Whether....

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....erved the deficiencies and lacunae involved. According to TPO, the different brands of the same product cannot be compared under CUP method. The products which vary widely with respect to brand value, technology, cost of production, place of production, energy efficiency cannot be compared by CUP method. The DR argues that depending on the volume of sales, the sale price would vary. The assessee company had compared huge volumes of purchase with small / negligible quantities in the uncontrolled transactions, which is not proper. The DR has also quoted relevant judicial decisions in support of his action. Analysing the function carried out by the assessee company, the DR stated that Berry Ratio is the appropriate method for the comparability....

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....erwhelming the RPM adopted from Berry Ratio method on the reason that the company is not just trader. There was also value added service by the assessee company which is a permanent factor. According to TPO, the conduct of the assessee clearly shows that it is captive for AE. For this purpose rejecting the RPM, TPO has given the reasons that the assessee has not purchased all the materials from its AE. It purchased merely 50% of the materials such as battery and other related materials from domestic market and other independent enterprises. If the RPM is considered as most appropriate method, the margin earned by the assessee to purchase the material from other independent parties is also part of the gross profit earned by the asse....