TaxTMI 
TaxTMI 
2023 (2) TMI 189
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....MUM/2016. "1. General 1 On the facts and circumstances of the case and in law, the Learned Assessing Officer (AO)/Hon"ble Dispute Resolution Panel (DRP)/ Transfer Pricing Officer (TPO)(as the case may be) erred in - 1.1 Passing the order U/s. 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (the Act) making huge additions and disallowances on the basis of surmises, conjectures, presumptions and assumptions and without considering the papers and documents submitted as also submission jade during the course of assessment proceedings and the proceedings before the Hon"ble Dispute Resolution Panel. 1.2 Passing the impugned order which is illegal and bad in law and consequently, null and void. 2. Transfer Pricing Issues: 2 On the facts and circumstances of the case and in law, the learned Assessing Officer (AO)/ Hon"ble Dispute Resolution Panel (DRP)/ Transfer Pricing Officer (TPO)(as the case may be) erred in- 2.1 Not upholding the alternate objection of the appellant that the learned AO did not satisfy himself about the necessity and requirement of referring the matter for determination of arm"s length price in respect o....
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.... The Learned TPO erred in proposing and the Hon"ble DRP further erred in considering the TPO"s action of selection of Comparable Uncontrolled Price ("CUP") method as most appropriate method for determining the arm"s length price of the international transaction ,without appreciating that the purported use of CUP data was not appropriate in terms of Rule 10B(2) and 10B(3) of the Rules. (C) Cherry Picking Without prejudice to above, on the facts and in the circumstances of the case, and in law, the Learned TPO erred and the Hon"ble DRP further erred in not considering that in case CUP method is considered as most appropriate method, the information of the raw material procured by other companies including USV, Intas and Torrent Pharma should also be called by using the powers under section 133(6). (d)Non consideration of commercial and economic circumstances The Ld DRP and consequently the Ld. AO erred in confirming the TPO"s action of selecting and application of the CUP method as the most appropriate method without appreciating the Appellant"s commercial rationale and economic circumstances that the import of raw material from the AE was in rel....
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....he Act. 4. Distribution of free samples - Rs. 3,00,62,583/-: On the facts and in the circumstances of the case, and in law the Learned AO/ the Hon"ble DRP erred in - (i) disallowing cost of samples distributed of Rs. 3,00,62,583/- on the ground that the issue was elaborately discussed in the previous years and the additions made in the case of the appellant were sustained and following, the directions of the Hon. DRP in assessment year 2006-07, 2007-08, 2009-10 and 2010-11. (ii) not following the directions of the Hon. Income Tax Appellate Tribunal in appellant"s own case in respect of assessment year 2003-04 wherein, it has been directed that upon furnishing the details, i.e. names, addresses of the Doctors to whom the samples order of the Hon. Income Tax Appellate Tribunal was brought to the notice of the Hon. DRP/ Ld. A.O. (iii) disregarding the details furnished as regards the names, address and quantities distributed for the entire year in the CD format and not verifying the details submitted to him by issuing the notice u/s. 133(6) as mentioned to him by and wrongly stating that he could not carry out so called independent investig....
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....ical service appreciating the fact that the assessee failed to substantiate that the assessee has benefited from the services so availed, the cost of services as incurred by the AE, the basis of allocation/allocation keys used by the AE to allocate the proportionate cost to the assessee and the quantification of the cost of services actually rendered by the AE to the assessee. 2. On the facts and in the circumstances of the case and in law, the Hon"ble DRP erred in deleting the addition on account of disallowance u/s. 2(24)(x) r.w.s. 36(1) of the Act by holding that provisions of Section 43B of the Act are applicable without appreciating the fact that the issue was not governed by the provisions of section 43B of the Act in view of the CBDT"s Circular No. 22/2015 dated 17.12.2015. 3. The appellant prays that the Directions of the Ld. DRP-1, Mumbai on the above grounds be set aside to the file of the AO or confirm the order of the AO." 04. The brief facts of the case shows that assessee is a company engaged in the business of manufacturing of pharmaceutical. It is subsidiary of Merk Group, Germany. 05. It filed its return of income on 29.11.2011 declaring inc....
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....rademark of Merk Global. It is a proprietary product of the group and there is a huge difference in quality, contractual terms of the product, therefore, the external CUP suggested by the TPO cannot be applied. 08. The learned TPO rejected the contention of the assessee adopted external CUP and held that 10% adjustment in the price is allowable. The AO/TPO also considered the volume discount. The CUP price was determined at Rs. 33,086 Per.Kg. It was applied on total quantity consumedof 407.30Kg and thereafter adjustment of Rs. 93,28,708/- was made to the international transaction of import of material. 09. The assessee has also paid technical consultancy Rs. 3,30,90,000/- which was also benchmarked using TNMM method. The assessee paid the above fees for support of engineering of production and quality control, training, advising, etc. It was a fixed fee of Rs. 3,00,00,000/- Per Annum plus applicable taxes. The ld. TPO asked the assessee to satisfy whether the services have been rendered or not. On the basis of the documents submitted by the assessee, the ld. TPO held that he needs to makea reasonable estimate of whatever services rendered by the associated enterprises. He est....
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.... the ld. Assessing Officer, and ld. AO is aggrieved against the transfer pricing adjustment on account of technical fees deleted by the ld. DRP and disallowance of late payment of employeescontribution fees deleted by the DRP. 014. We first come to the appeal of the ld. Assessing Officer. The first ground raised by the ld. TPO is against the direction of the ld. DRP wherein the ld. DRP followed the decision of the co-ordinate bench for A.Y. 2003-04. During the course of hearing, the ld. Authorized Representative submitted that for A.Y. 2009-10 and 2010-11 the order of the co-ordinate bench dated 31.03.2016 wherein the Hon"ble Bombay High Court in its order dated 16.09.2019 in Question No. 2(b) the deletion of the adjustment on account of payment of technical fees aggregated with other international transaction and applying TNMM was upheld. We also find that for A.Y. 2003-04 this issue is decided in favor of the assessee. In view of the above judicial precedent available in favor of the assessee on identical facts and circumstances of the case, we do not find any infirmity in the direction of the ld. Dispute Resolution Panel in deleting the adjustment of Rs.3,03,90,000/- on accou....
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....mphenol Interconnect P Ltd [2018] 91 taxmann.com 441 (Bombay)/[2019] 410 ITR 373 (Bombay) to submit that Where assessee made imports and exports of finished goods and various adjustments were required to be made due to differences in FAR analysis, CUP would not be MAM to arrive at ALP of transaction; TNM method would be MAM. 019. The ld. DR submitted that the issue is squarely covered against the assessee in assessee"s own case is specifically referred to the decision in the case of assessee for A.Y. 2009-10, 2010-11 where the issued has been discussed elaborately. Therefore, according to him there is no reason to deviate from that order. He vehemently submitted that even the judicial discipline demands that the ITAT must follow the order of the Bench. 020. We have carefully considered the rival contention and pursued the orders of the lower authorities. We find that identical issue arose in the case of the assessee for A.Y. 2009-10, 2010-11 and ITA No. 4926/MUM/2014 for A.Y. 2009-10 wherein for order dated 31.03.2016 has upheld the applicability of CUP Method, confirming the rejecting of TNMM as the most appropriate method. The co-ordinate Bench also considered the reasonabl....