TaxTMI 
TaxTMI 
2023 (9) TMI 973
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.... statutory notices were issued to the assessee calling for various details. The Ld.AO noted that the assessee had international transactions with its associated enterprise for the year under consideration. 2.1 The case of the assessee was referred to the transfer pricing officer to compute arms length price of the international transaction. The Ld.TPO upon receipt of the reference, called upon the assessee to furnish economic details of the international transaction in form 3CEB. It was noted by the Ld.TPO that following were the international transaction undertaken by the assessee. Particular Received/Receivable Paid/ Payable Method Purchase of sample Products 260,71,253 TNMM Import of finished goods from AEs 27789,71,974 TNMM Import of finished goods from AEs 167,08,106 TNMM Payment towards local sourcing support 2128,16,303 TNMM Receipt of fee towards procurement support services 757,87,134 TNMM Receipt of services fees towards providing product development services 331,85,856 TNMM Reimbursement of expenses 23,00,476 TNMM Reimburs....
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....has not clearly established the services received by it, from the third party local manufacturers and thus, these transactions was separated from the distribution segment as against the aggregate approach adopted by the assessee. The Ld.TPO thus proposed an adjustment by disallowing the payment towards local sourcing support services at Rs. 21,28,16,303/-. 2.9 Upon receipt of the transfer pricing order, the Ld.TPO passed the draft assessment order on 17.09.2021 by proposing an addition of Rs. 1,22,75,09,750/-. On receipt of the draft assessment order, the assessee filed objections before the DRP. 2.10 The DRP after considering the objections of the assessee did not appreciate the comparables that was sought for exclusion by assessee. In respect of certain liabilities that were treated as operating in nature by the Ld.TPO under the distribution segment, the DRP directed that liabilities no longer required to be returned back, miscellaneous income and interest income on vendor advances do not form part of day-to-day business activities of the assessee and therefore should be considered as non-operating in nature while computing the margin of assessee. 2.11 As regards, inc....
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....n on product development, marketing strategy and other related matters. These strategies are percolated down to various PUMA Group entities across the globe. India specific budgets are determined by PUMA Sports India in consultation with and approval of PUMA SE and PUMA Austria. PUMA Sports India is advised of new product launches on a regular basis so that this can be incorporated into its budgeting and planning process. No strategic functions are performed by PUMA Sports India. PUMA Sports India primarily performs the tactical managerial functions regarding day to day management of its business viz. human resources, financial management, routine administration etc. Having said the above, PUMA Sports India receives regular support from PUMA Austria in areas such as strategy formulation, auditing, procurement and centralized buying, IT, budgeting, etc. 4.2.10.2 Product creation (design and development), manufacturing and procurement functions Product creation and related research and development/engineering activities are performed by PUMA SE with the assistance from other affiliated entities engaging in product creation and research and developm....
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....ndia. • Procurement a. Sourcing of products from overseas affiliates/ third party vendors Under previous sourcing structure, all the PUMA sales entities (including PUMA Sports India) placed their product requirements to the third party vendors and also negotiated the final pricing of the products. PUMA Sports India procured products from PUMA Austria and other AEs as well. Purchase orders from Asian vendors was handled by WCL. WCL carried out buying agency functions for PUMA sales entities as well as for third party licensees/distributors. As a buying agent, WCL only negotiated, but never concluded any purchase contracts with third party vendors on behalf of PUMA sales entities. Accordingly, there were weaknesses observed in the old sourcing structure as there was consistency and transparency in price resulting in PUMA sales entities exposed to foreign exchange risks. Also the sourcing structure was more complex in nature, making it difficult for PUMA group to administer the procurement functions of the PUMA sales entities. Owing to the above difficulties, PUMA group implemented a new sourcing structure whereby sourcing of products would be t....
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....nation and document management. In order to effectively ensure the accomplishment of its centralized buying/TradeCo function, PUMA Austria has implemented and maintains a customized SAP ERP solution which has been in use for many years. The system was designed/customized in accordance with PUMA Austria's specifications. PUMA Sports India's local merchandisers are responsible for reporting product requirements to PUMA Austria via SAP after having received their customer orders. PUMA Austria's sourcing team consolidates all purchase orders received (including purchase orders from third party distributors) and places them with PIT. PUMA Austria handles the communication with PIT to arrange delivery of the manufactured products according to the Incoterms stipulated in the relevant purchase orders. In the case of PUMA Sports India, products are usually shipped directly from vendors into its own warehouse. In this case, customs clearance is managed by PUMA Sports India itself. Due to its intermediate role in the purchase process, PUMA Austria is particularly exposed to foreign exchange risks. Although PUMA Sports India is responsible for de....
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....sible for the global brand building, communication and marketing activities, irrespective of whether products are distributed via wholesale or retail distribution channels. The direction of the brand is set by the PUMA SE, as well as decisions regarding the major campaigns that will be operated globally, including the ideation, creative and specific themes around which the campaigns will operate. Sales subsidiaries are required to adapt these standards and marketing themes in their market, with necessary alterations that are market specific, without diluting the theme of the communication. Local Marketing: PUMA Sports India PUMA Sports India carries out local marketing and sponsoring activities, which comprise e.g. local advertisements (by the use of radio, television, cinemas, internet, publications, magazines, in sports arenas, etc.). The marketing and sponsoring activities include payments to athletes, clubs, and federations with national rather than international recognition as well as for products given away. In particular, the local advertising and sponsoring activities refer to national assets, i.e. the primary focus is to promote PUMA brand in the local ma....
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....estions; • Budget planning on annual/quarterly basis; • Preparation of presentations, follow-up sales meetings, preparation of offers, rolling forecast planning and strategic customer planning. The field sales team is responsible for different geographical regions within each PUMA Sports India's sales territory. The functions performed by the field sales team inter alia include: • Presentation and sales of PUMA products (apparel, footwear, accessories); • Regular customer visits and development of customer relationships; • Responsibility for sales and implementation of sales targets; • Operational implementation of sales strategies; or • Market observation and competition analysis. The sales team is supported by staff in the area of customer services, credit control, administration and visual merchandising. For the most part, PUMA Sports India operates at the wholesale level. Further, with respect to retail sales, PUMA Sports India is responsible for the overall operations of retail stores, the general vision/direction and the related pricing of the products. ....
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....rs, PUMA Sports India's sourcing team inspects the quality of products at the time of production as well as at the time when goods are received in warehouse from the manufacturer's factory. The sourcing team regularly visits the factory for detailed inspection of each and every type of product being manufactured and further ensures that the sample product meets the requirements and expectations as per the required quality. Also, if there are any issues arising at the time of production process, the sourcing team tries to resolve the same and ensures that the order is delivered within agreed time. 4.2.10.6 Sales price to customers Pricing of the product is an important function. Determination of a suitable price for the product includes various aspects which needs to be considered like fluctuation in the market, prices of the competitor products etc. PUMA Sports India is involved in the determination of the MRP of the PUMA branded products in India. PUMA Sports India fixes the maximum recommended price for the sale of PUMA products in India. 4.2.10.7 Warehousing the products PUMA Sports India is responsible for arranging for an adequate st....
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....nexpected failure of sales to materialize could not only lead to a decline in sales/profits in any year but also to a failure of sales revenue to cover committed expenditure for both, PUMA Austria and PUMA Sports India. PUMA Sports India incurs advance spending commitments in relation to advertising and promotion. PUMA Sports India could suffer lower than expected sales due to untimely arrival of the product, or arrival of sub-standard product that the customer refuses to accept, and this could adversely affect its longer-term relationship with retailers as well as shorter term profitability. Generally, both PUMA Austria and PUMA Sports India rely on PUMA SE to maintain the desirability of the brand, and to launch product ranges that meet market needs. Further, PUMA Sports India is responsible for marketing the finished goods to ensure that the targeted sales volume results in recovery of purchase price, related expenses and a reasonable margin. Hence, market risk is borne by PUMA Sports India with regard to Indian market. 4.2.11.2 Product liability risk Product liability risk arises when a corporate provides a particular produc....
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....e retailers may seek not to call off all the orders placed. With respect to retail business also, PUMA Sports India would be responsible to determine its inventory levels and re-order levels based on the estimated demand in the market. Also with relation to excess/ unsold stock, PUMA Sports India may sell the stock at discounted price to its customers. Accordingly, PUMA Sports India would bear the risk of loss on account of unsold/ excess stock. 4.2.11.4 Credit and collection risks The credit and collection risks arise when a firm supplies products or services to a customer in advance of the payment. In such a scenario the firm runs the risk that the customer will fail to make payment. With respect of wholesale sales, PUMA Sports India negotiates the price and the other terms of the contract with its customers (i.e. wholesalers/distributors etc.), such as payment terms, delivery scheduling and pricing. PUMA Sports India filtimAtPly concludes the contract with the wholesalers/distributors etc. As PUMA Sports India directly transacts with its customers, it bears the risks arising from the contracts with the customers i.e. credit and collection risks in rela....
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....655 Total 48,142,655 • Product and Marketing Intangibles PUMA SE is the legal and economic owner of the outcome of all product creation efforts and related technical research & development and engineering services, i.e. all rights, titles and interests in and to all current and future intellectual property ("IP") rights (e.g. copyrights, marks, patents, utility models, designs, concepts, ideas and/or methods) are exclusively owned by PUMA SE. PUMA SE ultimately bears all expenses related to the creation of new PUMA branded products (including third party expenses and expenses incurred by PUMA's "regional design centers"). In addition, PUMA SE is the legal and economic owner of the PUMA brand, logo and associated trademarks. PUMA SE has granted to PUMA sales entities the license and right to use its brand and trademarks, as well as international marketing concepts and campaigns. In view of the above, PUMA Sports India does not own any non-routine product or marketing intangibles. • Sourcing related intangibles Procurement/ sourcing intangible assets may arise from informational advantages provided by the location and per....
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....usiness) as a potential intangible asset but the same is vulnerable to market competition given the fact that the customers do not incur any costs for switching to other suppliers. Also, PUMA Sports India does not have control on its customer's nor there are any binding agreements for purchase of PUMA products. Similar lists are also developed by various business units operating in the industry. From an individual customer's perspective, it is the brand image and product design which enhance product loyalty amongst the customers. Since the brand image and product design are developed and maintained by PUMA SE, customer list developed does not put PUMA Sports India in a commanding position or provide any unique intangible to earn more profits. The customer relation enables PUMA Sports India to earn routine returns for its distribution activity and survive in the market. 4.4 Characterization of entity Based on the facts as presented in the above analysis of functions performed, assets employed and risks assumed by PUMA and its AEs, PUMA Sports India as a licensed distributor/ sales entity bearing risks similar to other distributors operatin....
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.... Services"). • PIT shall exercise its usual diligence in making available the technical know-how to PUMA Sports India. PIT shall, however, not be responsible or liable for (i) any oversights or errors in the technical Know-how and its transmission, (ii) claims, actions or demands of third parties with respect to the Licensed Products manufactured by or for PUMA Sports India under the Technical Know-how or (iii) any infringement of the Licensed Trademarks by third parties and damages resulting therefrom. In case an oversight or error in any part of the technical know-how should occur, PIT shall correct such oversight or error after detection of the same. • PIT is authorized to use support services by PUMA or any of its Affiliates • PUMA Sports India undertakes to strictly abide the quality standards and other standards as PIT may stipulate from time to time with respect to the Licensed Products to be manufactured under the Agreement Support Services PITS performs the support activities in Hong Kong under the oversight of PIT. Support service will cover order management and supply chain management. PIT provides followi....
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....sumer product safety laws. In addition to the above, template of "IP Right Protection Undertaking" which is required to be executed between the vendor or component supplier and PUMA Sports India, supplying goods to PUMA Sports India have been also provided in order to ensure and protect the validity, integrity and image of the Principal IP. Further PIT has also provided PUMA Sports India certain insurance conditions whereby PUMA Sports India shall oblige its unrelated vendors to obtain sufficient insurance coverage in case of claims in connection with product liability or any recall of Licensed Products in accordance of Kering Group insurance policy or own insurance coverage meeting. Payment to PIT in lieu of above local sourcing support services received For the period between 01 April 2016 to 31 December 2016, PUMA Sports India has paid a service fee at the rate of 2 percent of the FOB price i.e. the price of licensed products invoiced from unrelated vendors to PUMA Sports India. With effect from 01st January 2017, to realign with PUMA's transfer pricing policy for sourcing activities at a global level, the service fee payable by PUMA Sport....
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....C) 1,01,77,71,658 97,38,22,686 59,11,76,407 Operating profit/Operating Revenue (D) = (C)/(A) 4.19% 3.81% 2.28% It is noted that the Ld.TPO has not verified the above facts before rejecting this comparable to be failing the persistent loss making filter. 4.5 We therefore remand this comparable back to the Ld.AO/TPO to carry out necessary verification having regard to the annual reports of this comparable that has already there placed on record. Assessee may assist the Ld.TPO/AO in determining the eligibility of this comparable by providing relevant information as called for. Needless to say that proper opportunity of being heard must be granted to assessee. Accordingly, ground no. 11 raised by assessee stands allowed for statistical purposes. 5. Ground no. 14 is raised by assessee for rejecting the following comparables. a) KD Trend Wear Ltd. b) Sohum Shoppe Ltd. c) Major Brands Pvt. Ltd. It is submitted that, the above comparables were rejected by the Ld.TPO as these were not appearing in the search matrix of the TPO. The Ld.AR emphasized that the three comparables passes through all the filters applied by the Ld.TPO an....
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.... use of these filters has been constantly upheld by the honourable Tribunals in a number of cases. It is not the case of the appellant that TPO has used some filter which has not been used in other cases. In view of this, this argument should be rejected ii) The comparables are part of the search matrix but was rejected because some reasons of the TPO with which the appellant doesn't agree. If this is the case, the appellant must place those arguments before DRP as well as before the honourable bench. The comparables need to be included or not will be decided as per the merits of the argument which is being done in all the cases related to Transfer Pricing. 4. If these comparables are not covered in the above categories, then from where these comparables have come? Whether these comparables were not in these two databases on the date of search by TPO but were included later in the database of Prowess and Capitalline. If this is the case, then the only way to include these comparables will be by the way of a fresh search. Then, the case must be sent back to the TPO for doing a fresh search. But whether this exercise will serve any purpose? The fresh search will....
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....sions. It is clear from the order of the DRP that the DRP has not considered the plea of the Assessee in proper perspective. The fact that the TPO rejected the TP study of the Assessee cannot be the basis not to consider the claim of the Assessee for inclusion of comparable companies. The TPO excluded these companies only on the ground that information related to these companies was not available in the public domain and this fact was shown to be an incorrect assumption by the Assessee in the submissions before the DRP. In such circumstances, it was incumbent on the part of the DRP to have adjudicated the question of inclusion of these companies as comparable companies. The fact that these companies do not figure in the search matrix of the TPO is not and cannot be a ground not to consider inclusion of these companies as comparable companies. Since the DRP has failed to do so, we are of the view that the issue regarding inclusion of the aforesaid companies as comparable companies should be set aside to AO/TPO for fresh consideration in the light of the information available in public domain. Thus ground No. 7 is treated as allowed for statistical purposes." Respectfully followin....
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....e company passes the filtered criteria. If we start considering the some companies which have failed the filter test, it will also empower the TPO to consider some of the companies which has failed the filter test and hence were not part of the search matrix." We have perused the submissions advanced by both sides in the light of records placed before us. 5.8 On perusal of the annual report of this company the business profile is revealed to be primarily engaged in business of trading of footwear and apparels etc. Further, it is the submission of the assessee that the parent company of this comparable is into manufacturing activity whereas this company perse engaged in trading activity. In our considered opinion, this needs to be verified and in the event it is found that this comparable is carrying out trading activity, the same may be included. Accordingly, we remand this comparable back to the Ld.AO/TPO for verification as directed above. Aditya Birla Fashion and Retail Ltd. 5.9 The Ld.AR submitted that the comparable Aditya Birla Fashion and Retail Ltd. is engaged in manufacturing and distribution of branded fashion apparel and accessories as well as retailing of ap....
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....ally incomparable to the distribution business of the Assessee. (Page 78 and 93 of AR of FY 2017-18, PB reference no 1854 of PB-2 and 1869 of PB II). 6.2 He further submitted that in Assessee's own case for AY 2015-16, Metro Shoes Limited was excluded from the list of comparable companies, on the ground that the company is engaged predominantly into manufacturing activities. 6.3 It is submitted that this company is functionally not similar with that of assessee. The Ld.AR relied on assessee's own case for Assessment Year 2015-16 in IT(TP)A No. 306/Bang/2022 vide order dated 26.09.2022 wherein this Tribunal observed and held as under: "11. We heard the DR. During the course of hearing the ld AR drew our attention to the details tabulated from the financials of Metro Shoes Ltd., wherein trading income as a percentage of the total revenue is more than 25%. The details of the same is extracted below: - Particulars Metro Shoes Ltd Mar-13 Page no. ref - PB II Mar-14 Page no. ref - PB II Mar-15 Page no. ref - PB II Trading Income 24,741 974 29,345 974 32,612 1276 Manufacturing Income 41,863 974 47,254 ....
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....We have perused the submissions advanced by both sides in the light of records placed before us. 6.9 We note that assessee is challenging the functional similarity of this comparable only because the rental expenditure of this comparable is much lower than the rental expenditure incurred by the assessee. It is the submission of the Ld.AR that the high rental expenditure in the hands of the assessee affects the operating profits and therefore the business model is different as compared to Adidas. 6.10 In our view, working capital adjustment would take care of these itself by not considering such item which can be identified for computing the operating profit of the assessee in order to iron out the differences. We direct the Ld.AO/TPO to consider this comparable by excluding the rental expenditure for the purpose of computing the margins to determine the comparability. Accordingly, this comparable is directed for inclusion. Sreeleathers Ltd. 6.11 This comparable is sought for exclusion by assessee as it is submitted to be functionally different. The Ld.AR submitted that this comparable operates on a different business model as compared to assessee. It is submitted tha....
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....evenue from ritual business: - Sl. No. Name & Description of main products/services NIC Code of the Product/Service % of total turnover of the company 1. Footwear expenses 51312 12.78% 2. Footwear Retail 52323 66.76% 3. Leather Goods for Accessories 52324 20.46% 16. We also notice that the assessee has raised this contention before the DRP which is not been considered by the DRP by stating that it is not valid since the TPO and the assessee were in consensus in not applying the wholesale retail filter. In view of the above and considering the provisions contained in Rule 10B (2)(d) we are of the considered view that Sreeleather Ltd. should be excluded as comparable." Respectfully following the above view, we direct exclusion of this comparable from the final list. Pokarna Marketing Pvt. Ltd. 6.14 The Ld.AR submitted that sufficient information is not available in respect of this company, however the Ld.TPO has adopted this comparable only observing the principle business activity to be wholesale distribution of textiles. 6.15 The Ld.DR on the contrary relied on the orders passed by authorities below. We have pe....
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.... has been applied and in the event it is found to satisfy all the necessary filters, the same be considered. Accordingly we remand this comparable back to the Ld.AO/TPO. Accordingly this ground raised by the assessee stands allowed as indicated hereinabove. 7. Ground no. 16 is regards to wrong computation of operating margin of the following comparables. a) Tommy Hilfiger Arvind Fashion Pvt. Ltd. b) V F Brands India Pvt. Ltd. c) Sreeleathers Ltd. As we have already excluded Sreeleathers Ltd. in the preceding paragraphs, the same is excluded from the list. 7.1 With regards to V F Brands India Pvt. Ltd. and Tommy Hilfiger Arvind Fashion Pvt. Ltd., the Ld.AR submitted that the operating margin considered by the Ld.TPO of these companies are incorrect. 7.2 We accordingly direct the Ld.TPO to recomputed the ALP having regards to the financials of the two companies and determine the margins afresh in accordance with law. Accordingly, this ground raised by assessee stands allowed for statistical purposes. 8. Ground no. 17 is regarding the working capital adjustment not granted to assessee. 8.1 After hearing the contentions of both the sid....
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.... comparison. The transfer pricing exercise would therefore fail. Therefore, in keeping with the OECD guidelines, endeavor should be made to bring in comparable companies for the purpose of broad comparison. Therefore the working capital adjustment as claimed by the assessee should be allowed. We hold and direct accordingly. 19. In the result, the appeal of the assessee is allowed." 6.3 In view of the above order of the Tribunal, we inclined to remit the issue to the file of AO/TPO to determine the correct working capital adjustment." Accordingly, this ground raised by assessee stands allowed for statistical purposes. 9. Ground no. 18 is in respect of refusing the risk adjustment by the Ld.TPO. The same has been rejected as relevant data in respect of the comparables were not provided by the assessee. in the event the assessee is able to establish the risks undertaken by the outstanding comparables, the same may be considered in accordance with Rule 10B by the Ld.TPO. Necessary verification may be carried out in respect of the same by the Ld.TPO. Accordingly this ground raised by assessee stands partly allowed for statistical purposes. 10. Ground nos. 1....
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....hny/2017] • Hyderabad Tribunal in the case of Polartech India Pvt Ltd Vs Asstt. CIT (2013) 156 TTJ 0659 • Delhi Tribunal, in the case of Hi-Lex India Private Limited [ITA No. 2036/DeI/2014 and ITA No. 1849/De1/2014] • Ahmedabad Tribunal in case of Liquid Controls India (P) Ltd (ITA No.79/Ahd/2010) (AY 2002-03) • Mumbai Tribunal in case of Emersons Process Management India P td (ITA NO 8118/M/2010) (AY-2006-07) • Mumbai Tribunal in case of DCIT vs Starlite (133 TTJ 425) (Mum) (AY 2002-03) On the contrary, the Ld.DR placed reliance on orders passed by authorities below. We have perused the submissions advanced by both sides in the light of records placed before us. 10.3 Based on the above submissions, we direct the Ld.AO to verify the computation of the international transaction to the total operating cost as provided by the assessee hereinabove. In any event, the transfer pricing adjustment has to be restricted to the value of international transaction alone. The Ld.AO is directed to consider the claim of assessee in accordance with law. Having regard to the observations of various Tribunals and Hon'ble High C....
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....port of his submission, that closely linked transactions are to be aggregated. • Autoliv India Pvt. Ltd. [TS-1033-ITAT-2017 (Bang)-TP] • Demag Cranes & Components vs. DCIT [ITA No. 1683/PN/2011] • SRF Limited [ITA No. 2064/Del/2014] • Toyota Kirloskar Motor (P) Ltd. [TS-217-ITAT-2014 (Bang)-TP] • Knorr-Bremse India Private Limited vs. ACIT [TS-558-HC-2015 (P&H)- TP] • Fosroc Chemicals India Pvt. Ltd. [TS-572-ITAT-2017 (Bang)-TP] • Kaypee Electronics & Associates Pvt. Ltd. [TS-310-ITAT-2017 (Bang)-TP] • Sony Ericsson Mobile Communications India Pvt. Ltd. and others [ITA No. 16/2014] • GBT India Pvt. Ltd Vs. The A.C.I.T [TS-90-ITAT-2020(DEL)-TP] • Demag Cranes & Components (ITA No. 1683/PN/2011) • Ericsson Mobile Communications India Pvt. Ltd. and others [ITA No. 16/2014] • Avery Dennison (India) P Ltd [TS-619-ITAT-2015(Del)- TP] 11.6 He submitted that, a similar issue has been considered by Coordinate Bench of this Tribunal in assessee's own case, wherein the buying commission fee paid by the assessee was treated as an integra....
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.... chain management services to PITS for export of goods from third party Indian vendors. 12.5 From the above para it is abundantly clear that the assessee has the capability, resources and the knowledge about the local manufacturers directly, without help of PIT. Moreover, it is practically impossible for PIT, a company headquartered in Germany to coordinate the procurement made locally as per the needs of the local market. 12.6 In this regard it is pertinent to note the bed rock of the Transfer Pricing audit that is whether two independent parties would have entered into such transaction and if so, what would be the price it would have charged for such service? Based on the above it is crystal clear that no two independent enterprises would have entered into such a transaction as the assessee and the PIT have, especially in view of the fact that the assessee continues to show poor profits and still pays a procurement fee to the PIT. Thus, the transactions are routed through the PIT in order to shift profits outside India. 12.7 Hence, we are inclined to uphold the TPOs decision of holding the ALP of the payments towards local sourcing support as NIL. Thus,....
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....or the above services, assessee has to pay a service fee at the rate of 7% of the FOB price as per agreement dated 01.04.2015 which has been revised w.e.f. 01.01.2017. Thus the assessee has aggregated following transactions to be interlinked with the trading activity. • Cost of samples • Payment of local sourcing support fees to PIT • Payment made to PUMA SE towards IT related expenses • Receipt of service fee from WCL for rendering procurement support services • Receipt of service fee from DSL for rendering product development services • Receipt of service fee from PITS for rendering supply chain services • Receipt of store layout design charges from PUMA Austria • Reimbursement of expenses paid to AEs • Reimbursement of expenses recovered from AEs • Sale of products 11.11 The Hon'ble Punjab & Haryana High Court in Knorr Bremse India (P) Ltd. vs. ACIT reported in (2016) 380 ITR 307 considered the question of aggregation of international transactions. Their Lordships laid down the principles of aggregation of international transactions by holdi....
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.... Ld.TPO/AO has not bench marked the transaction in accordance with the transfer pricing procedures. We therefore remand this issue back to the Ld.TPO to carry out necessary verification and to determine the arms length price by adopting internal CUP. Needless to say that proper opportunity of being heard must be granted to the assessee. We therefore remand this issue back to the Ld.TPO for de novo consideration in accordance with law. Accordingly this ground No. 28 raised by the assessee stands allowed and Grounds 21-27 stands dismissed. In the result, the appeal filed by assessee stands partly allowed. Order pronounced in the open court on 26^th July, 2023. ============= Document 1Traceback (most recent call last): File "C:\inetpub\vhosts\taxmanagementindia.com\httpdocs\python_image_text_project\google\direct_extract_text.py", line 19, in from google_doc_api import process_single_document File "C:\inetpub\vhosts\taxmanagementindia.com\httpdocs\python_image_text_project\google\google_doc_api.py", line 345 elif mime_type in ["image/gif"]: IndentationError: expected an indented block after 'if' statement on line 341 Document 2 7. 8. 9. 10. ....
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.... Aditya Birla Fashion and (iii) Retail Ltd. on the ground that such comparable companies fail core function filter without highlighting the functional difference and not appreciating that both the companies are functionally comparable to the Appellant. Ld. TPO/AO/DRP erred, in law and in facts in considering/including (i) Metro Brands Limited (Also known as Metro Shoes Limited), (ii) Adidas India Mktg. Pvt. Ltd., (iii) Pokarna Marketing Private Limited and (iv) Sreeleathers Limited ignoring that these companies are functionally not comparable to the Appellant 16. Ld. TPO/AO/ erred, in law and in facts, in wrongly computing operating margins of the companies considered, viz., (i) Tommy Hilfiger Arvind Fashion Pvt Ltd., (ii) VF Brands India Pvt. Ltd. and (iii) Sreeleathers Ltd. 17. Ld. TPO/AO/DRP erred, in law and facts, in not making suitable adjustments to accoun differences in the working capital of the Appellant vis-Ã -vis the comparables. Ld. TPO/AS/ORP failed to appreciate that consequence of lack of complete data for making accurate adjustme is exclusion of the company as comparable and not refusing working capital adjustment P....
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....nto consideration documentary/supporting evidence submitted by the Appellant in order to support the necessity of local sourcing support services and proceeded to conclude on presumptions. The learned AO/DRP/TPO have erred in concluding that the Appellant engaged PIT to shift profits outside India ignoring the business, commercial and industry realities and economic circumstances applicable to the Appellant. 28. Without prejudice, Ld. AO/ TPO have erred, in law and in facts, in not appreciating that in case of the sourcing support fee is considered to be NIL, then such expense incurred by the Appellant should also be reduced from the operating cost while computing the operating margin of the Appellant. 29. 30. Appellant craves leave to file such further grounds or modifying, substituting the above grounds. INDIA PV That Ld. AO has erred, on facts and in law, in levying interest under section 234B andection 234C of the Act. +6 Document 4 The Appellant submits that the above grounds of appeal are mutually exclusive and without prejudice to each other. The Appellant craves leave to add, amend, vary, omit or substitute, withdraw any ....