TaxTMI 
TaxTMI 
2024 (6) TMI 464
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....grounds of appeal. Ground no. 1 to 4 are in respect of a single issue i.e. adjustment of Rs. 6,94,53,296/- on account of international transaction of purchase of solar goods/lights and reimbursement of expenses and warranty cost claim. 2.1. In ground no. 5 of appeal, the assessee has assailed selection of comparables to benchmark the transactions of purchase of solar lights and goods. 2.2 In ground no.6 of appeal, the assessee has assailed adjustment in respect of interest rates. The ld. Authorized Representative of the assessee at the outset stated that, he is not pressing this ground of appeal on account of smallness of the amount involved. 2.3 Ground 7 and 8 of appeal are general, hence, require no separate adjudication. 3. S....
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....r goods and other accessories and warranty cost claim. The ld. AR submitted that the sole reason of TPO to reject RPM selected by the assessee is that the warranty claims are to be clubbed with transaction of purchase of solar goods. The ld. AR vehemently submitted that warranty claims where the goods are replaced on account of manufacturing defect is taken care of by the AEs. The warranty against manufacturing defects is given by the AE and the assessee is only a pass through entity. In support of his contention that where product is resold without any value addition, RPM is the most appropriate method he placed reliance on the following decisions: PCIT vs. Fujitsu India (P.) Ltd. 156 taxmann.com 310 (DEL) and Karcher Cleaning Systems P Lt....
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....s claimed that it has not made any value addition but the entire responsibility for developing market strategy including advertising marketing etc. is that of the assessee. Further, as per assessee's own submissions the replacement services are not backed by corresponding warranty by AE. The AE only takes care of manufacturing defects. Product liability and warranty risks are borne by the assessee. This fact has been admitted by the assessee in risk profile at page 113 of the paper book. In other words, rendering of services after sales is value addition made by the assessee. The ld. DR further referred to United Nations Article Manual on Transfer Pricing to contend that though product comparability is less important under resale price meth....
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....i.e. Whether the RPM applied by the assessee is the most appropriate method in the given facts or TNMM as adopted by the TPO after aggregating the transactions is to be applied? 9. In so far the activity of assessee viz. purchase of solar goods and accessories from AE and its resale in India, it is not under dispute. The assessee is also providing solar warranty claims on solar goods purchased from AEs. The assessee has applied RPM to benchmark the transaction of purchase of solar goods from AE and to benchmark the transaction of warranty claims and reimbursement of expenses, the assessee has applied the 'other method'. The TPO has aggregated the transaction of purchase of solar goods, reimbursement of expenses and warranty cost claims a....