2024 (7) TMI 1054

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....39;ble Dispute Resolution Panel ("DRP") and consequently the learned Assessing Officer (""AO") erred in facts and in law in confirming the addition of Rs. 8,83,76, 149/- on account of variation in Arm's Length Price (*"ALP") of the transaction of purchase of goods from Associated Enterprises ("AE"). 2. Hon'ble DRP and consequently the learned AO erred in facts and in law in rejecting Transaction Net Margin Method ("TNMM") as most appropriate method for determination of ALP of the transaction of purchase of goods from AE. 3. Hon'ble DRP and consequently the learned AO erred in facts and in law in adopting Resale Price Method ("RPM") as most appropriate method for determination of ALP of the transaction of purchase of goods fr....

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....aring of the appeal." 3. Representatives of both the sides were heard at length. Case records carefully perused and the judicial decisions brought to our notice duly considered. 4. Briefly stated, the facts of the case are that the primary business of the assessee during the year under consideration is to sell and distribute fiber glass products which are manufactured by its overseas AEs. The assessee adopted both the buy-sell model as well as sales commission model depending on how the customers are acquired and maintained. 5. In the buy-sell model, assessee imports products from its overseas AEs and resells the same to the customers in India and in the sales commission model, assessee's overseas AEs sell the products to the third party....

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.... Group Co. Ltd. Rs. 9,99,999   Total   Rs. 121,57,34,619 8. During the course of scrutiny assessment proceedings, the Transfer Pricing Officer (TPO) showcaused the assessee to explain as to why Transactional Net Margin Method (TNMM), should not be rejected and RPM applied as MAM. The assessee in its reply, strongly rejected the RPM as the MAM contending absence of reliable data with respect to degree of comparability and absence of reliance date relating to gross margins earned by the comparable companies. The objections raised by the assessee were dismissed by the TPO. 9. Coming to the comparables selected by the assessee, the TPO rejected ECMAS Resins Private Limited (ECMAS) as the said company was engaged in manufacturin....

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....s such as High Silica, Carbon Fiber, Basalt Fiber, Aramid, EMI (electromagnetic induction) and ESD (electromagnetic sensitive devices). The principle business activity of the company is trading in textile products. 10.1. In our considered opinion, this is entirely different from the products sole by the assessee. The assessee deals in basic glass fiber products like assemble rovings, direct rovings, chopped strands, shopper strand mat. Thus, the products offered by ATTPL are quite different from fiber glass products in terms of its uses and industrial application. Because of the product dissimilarity, we are of the considered view that ATTPL is not a good comparable and direct the TPO to exclude the same from the final list of comparables.....