2022 (12) TMI 201

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....he assessee herein is a subsidiary company of M/s. Hydac group, Germany. Hydac group is world leader in hydraulic accessories and components. The assessee herein is having a manufacturing facility in Mumbai and it is mainly engaged in the business of assembly of hydraulic accessories and components that fit into hydraulic systems. It is also engaged in the business of manufacturing certain electrical items. According to the learned AR manufacturing activity contributes 2.27% of the turnover. The assessee did not select any comparable companies in its transfer pricing study on the reasoning that it is engaged in the business of manufacturing/assembling of more than 20,000 items and there is no other enterprise which can be functionally compa....

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.... Sr.No. Hydac ASCO 1 Assembler - (TPO's order- Page 1, para 4) Plant & Machinery Gross Block of Rs 282 Lacs only (Page 6 of SPB) FAR differs substantially Full-fledged manufacturer - Plant & Machinery Gross Block of Rs 963 Lacs Page 20 of SPB 2 Importer of assemblies and components - approximately 20,000 items. Solenoid Valves (Magnets) only 1 of the many items Manufacturer of High Technology Solenoid Valves only and small quantity of other components 3 Solenoid Valves (Low Value Magnets) only 2 % of sales TO (98/4869) Lacs (Page 13 & 4 of SPB) High Value Solenoid Valves constitutes 74 % of TO (4459/ 6051) Lacs (Page 17 of SPB) 4 Sale price PU of Magnets = Rs. 288 (9855148 / 34241) (Page 13 of S....

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....f the assessee-company are broadly comparable, there is no reason to exclude any company. Accordingly he submitted that Asco (India) Ltd need not be excluded. 6. We have heard rival contentions and perused the record. We noticed from the order passed by learned TPO, that learned TPO has specifically observed that the assessee is mainly engaged in the assembling of Hydraulic accessories. In the statement of facts furnished before the Tribunal, it is stated that the assessee's manufacturing activity contributes 2.27% in the turnover, meaning thereby, majority of turnover has been achieved by the assessee from assembling activity only. It is the submission of learned AR that the assessee is engaged in the business of assembling of more than....