2024 (10) TMI 426

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....in the memo of appeal, Mr. Chawla, learned counsel, has in his usual fairness submitted that it is the question extracted below which alone would appear to arise for consideration:- "1. Whether the Hon'ble Income Tax Appellate Tribunal ("ITAT") is right in upholding the order of the Hon'ble Commissioner of Income Tax (Appeals) [CIT(A)], thereby deleting the respective Transfer Pricing Adjustment(s) with regard to international transaction(s) of sale of Paclitaxel, Disodium Pamidronate and purchase of Methelene Chloride Soluble ("MCS") by relying upon Transitional Net Margin Method ("TNMM") instead of Comparable Uncontrolled Price Method ("CUP"), as the 'Most Appropriate Method' for the purposes of determination of A....

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....0(B)(2) as to how the CUP method which requires high degree of comparability has been taken as MAM. The Appellant further contended that Ld. TPO has not shown that the data taken from International Business Information Services is uncontrolled transaction. Besides this, there were differences on account of following factors which TPO could not reconcile before applying CUP: - Profile of customer whether reseller, distributor or end user is not confirmed; - Pricing terms as to trade discounts, turnover discounts, cash discounts, return policy as such has not been compared; - Pricing impact on geography of UK versus Argentina has not been determined; - Quality of Product whether generic or otherwise and oth....

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.... & Disodium Pamidronate to UK Subsidiary Other sales Export Sale Actual 68,22,14,699 1,83,31,367 66,38,83,332 Interest Received Revenue 96,257 2,586 93,671 Misc. Receipts Revenue 81,459 2,189 79,270 Exchange Gain/Loss Revenue 18,21,564 48,946 17,72,618 Total (A)   68,42,13,978 1,83,85,088 66,58,28,890           Purchases Actual 52,02,98,766 1,47,17,528 50,55,81,238 Packing, freight & Forwarding Revenue 43,273 1,163 42,111 Salary Revenue 19,24,190 51,704 18,72,486 Charges General Revenue 1,34,92,684 3,62,554 1,31,30,131 Commission, Discount & Rebate Actual....

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.... geographical location of buyer are other very crucial factors which determine pricing, TPO has not satisfied even these basic requirements. In view of these facts and circumstances, TNMM is considered as MAM and the appellant has demonstrated by applying TNMM that its margin is better that that of comparables. In light of the above evidences and circumstances of the case, I am of view that international transaction of sale of Paclitaxel and Disodium Pamidronate satisfy the arm's length principle and it does not warrant an addition as done by the Ld. AOITPO. Accordingly, I hold that the addition of (Rs 98,79,900 + 67,35,902) Rs 1,66,15,802 deserve to be deleted. The ground of appeal is accordingly allowed." 4. It was also found by th....