2022 (12) TMI 492

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....-17. 2. The short issue that we are required to adjudicate is whether or not the learned CIT(A) was justified in upholding the arm's length price adjustment of Rs. 17,63,878on the facts and in the circumstances of this case. For the records, however, the detailed grounds of appeal, as set out in the annexure to the memorandum of appeal, are as follows:- 1. Learned PO and CIT(A) erred in not understanding the business of the typical distributor engaged in the distribution of products, as any distribution agreement would include comprehensive clauses for protecting (PR, Copyrights, Distribution rights, exclusivity etc.), promoting (sales support, marketing guidance, etc.,) and enhancing operations. 2. Learned TPO and CIT(....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....IT(A) erred in violating Section 92C of the Income Tax Act,1961 (the Act), Rule 10B of the Income Tax Rules, 1962 (the Rules') indetermining the arm's length price for alleged services. The arbitrary approachadopted by Learned TPO to ascertain the markup is unjustified, flawed &incorrect. 3. The assessee before us is engaged in the business of distribution of synthetic stones and related products. These products are imported from it's associated enterprises abroad, and sold in the domestic market. During the course of ascertainment of the arm's length prices of it's transactions with the AE's, as referred to the TPO during the scrutiny assessment proceedings, the TPO, inter alia, noted that the assessee has incurred expenses of R....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed in advance. Considering the above, I agree with the finding of TPO that these expenses were incurredunder the specific instructions of the AE. Therefore, the assessee should have charged a mark-up on the same for providing these services to the AE. Regarding computation of armed length price, the assessee submitted that the TPO's has cherry picked the comparable however, apart from the data submission, no specific details with respect to comparable was given to shows that the comparable selected by TPO were erroneous. In view of the above, the contentions raised by assessee are rejected and the finding of TO is confirmed. This ground of appeal is dismissed. 4. The assessee is not satisfied and i....