TaxTMI 
TaxTMI 
2022 (12) TMI 1072
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....the assessee is a subsidiary of Karcher Beteilgungs GmbH which started its commercial activities on 16.04.2011 and is primarily engaged in the business of importing and resale of industrial cleaning systems in India. 3. In its TP documentation, a brief summary of economic analysis in respect of trading activities can be summarized as under: international transaction Most Appropriate Method ('MAM) Profit level indicator (PIT) Number of comparables Appellant's margin (GP/Sales) Comparables' margin (GP/Sales) Amount of transaction (INR) Trading activities Resale Price Method ('RPM') Gross profit margin ('GP/Tradingsales') 4 41.17% 6.79%(updated margin 12.40%) 17,72.27,847 4. Transacti....
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....already been substantially demonstrated before the Customs Office that the goods imported by the assessee are not for the purpose of local assembly into finished goods which has been accepted by the Customs Department. 10. The ld. counsel for the assessee vehemently objected to the rejection of most appropriate method adopted by the assessee. 11. Per contra, the ld. DR strongly supported the findings of the Assessing Officer/TPO. 12. We have given thoughtful consideration to the orders of the authorities below. It is not in dispute that the assessee is engaged in trading of goods. It is also not in dispute that the assessee does not add value to the goods purchased from related parties. The scope of inter company agreement is menti....
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.... up its business and employee costs included an exceptional expenditure amounting to Rs. 1,61,62,594/- for two of its expatriate employees towards payment for salaries and other expenses for the purpose of stabilizing the business in India as it was the first year of the company's operations. 17. This fact has also been appreciated by the DRP. 18. The co-ordinate bench of the Tribunal Mumbai Bench in ITA No. 6956/MUM/2012 in the case of M/s Videojet Technologies [I] Pvt Ltd. has made the following observations: "Further, we find that another reason given by the TPO/DRP for rejecting the RPM is that the assessee as per them was a fullfledged/ full risk distributor and was performing a host of functions which would involve huge....
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....bution activity, the selling and marketing expenses which are borne by the assessee would not lead to any value addition to the product in question. We, thus, in terms of our aforesaid observations vacate the view taken by the TPO/DRP, who had concluded that the freight, transaction cost, insurance discounts, rebates, packaging, duties, etc. would affect the reliability of gross profit margin as PLI for the purpose of comparison. In terms of our aforesaid observations, we are of the considered view that the TPO/DRP while dislodging the RPM followed by the assessee for benchmarking its international transactions, had lost sight of the fact that only the transaction of import of goods by the assessee from its AEs were to be benchmarked and al....