2022 (8) TMI 946

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....r has raised following grounds of appeal for A.Y. 2011-12: "1. On the facts and in the circumstances of the case and in law, the Ld.CIT (A) erred in holding that the Resale Price Method (RPM) was the most appropriate method for determining the arm's length price of the assessee's international transaction in respect of purchase and sale of online advertisement space ignoring the fact and the legal principle that as per Rule 10B(1)(b)(i), RPM can be used for determining the arm's length price of the assessee's international transactions in respect of only purchases from AE whereas the assessee has sale transaction also with its AE. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT ....

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.... be set-aside and that of the assessing officer be restored." 03. The fact shows that assessee is a company engaged in the business of resale of online advertisement space. It filed its return of income on 21st November, 2011 at a loss of Rs. 11,25,89,061/-. The case of the assessee was selected for scrutiny. As assessee has entered into international transaction, the matter was referred to Dy. Commissioner of Income Tax, Transfer Pricing Officer 1(3)(1), Mumbai (the learned Assessing Officer) for examination of the arm's length price of same. The learned Transfer Pricing Officer made an adjustment to the arm's length price of international transaction of purchase and sale of online advertisement space by Rs. 77,18,471/-. Fact shows that....

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....ssessee preferred the appeal before the learned CIT(A), wherein he directed the learned Transfer Pricing Officer to adopt resale price method as the most appropriate method. The total addition was deleted. Therefore, the learned Assessing Officer aggrieved and preferred this appeal. 07. The learned Departmental Representative vehemently supported the order of the learned Transfer Pricing Officer and submitted that more than distribution functions; the assessee is providing value added services in its international transactions. Therefore, resale price method cannot be taken as most appropriate method. She submitted that in such circumstances only Transactional Net Margin Method should be adopted. Therefore, she submitted that the order o....

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....he finding was also given that assessee is a startup company and is expanding its operations in India, therefore, It incurred such expenses for increasing its valuation. The above findings are not controverted by the Revenue authorities. We also do not find any infirmity in the order of the learned CIT(A) and therefore, we confirm his order. Accordingly, ground no.1 to 4 of the appeal of learned Assessing Officer is dismissed. 010. In the result, ITA No.3889/Mum/2017 for A.Y. 2011-12 filed by the learned Assessing Officer is dismissed. 011. ITA No.3890/Mum/2017 for A.Y. 2012-13 is also challenged before us raising identical grounds. The learned Departmental Representative confirmed that there is no change in the facts and circumstance....