TaxTMI 
TaxTMI 
2018 (6) TMI 1861
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....our consideration: "(a) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in directing the AO/TPO to benchmark only the AE transactions without appreciating that (a) the assessee itself in its transfer pricing study report (TPSR) has chosen entity level PLI to benchmark the AE transactions? (b) Whether on the facts and in the circumstance of the case and in law, the Tribunal is justified in law in directing the AO/TPO to include M/s. Tirumalai Chemicals Ltd. as one of the comparable thereby ignoring the finding of the TPO and DRP that M/s. Tirumalai Chemicals Ltd. is functionally different? (c) Whether on the facts and circumstances of the case and in law, the Tribunal erred in directing ....
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....saction Net Margin Method (TNMM) as the most appropriate method to determine the Arms Length Price (ALP) of transaction with its Associated Enterprises (AE). The Respondent in its Transfer Pricing Study relied upon M/s. Tirumalai Chemicals Ltd., as a comparable to determine the ALP of its transactions with its AE. (ii) The Transfer Pricing Officer (TPO) as well as the Dispute Resolution Panel (DRP) rejected the same as comparable. This, inter alia, on the ground that M/s. Tirumalai Chemicals Ltd., is functionally different. This on the ground that capacity utilization by M/s. Tirumalai Chemicals Ltd., (supra) was only 55% in case of one specialty chemical and 4% in the case of another specialty chemical. (iii) In appeal, the Tribunal no....
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....5 Re Question (c): (i) The impugned order of the Tribunal has upheld the order of the DRP that the provisions pertaining to the earlier years written back in the subject Assessment Year would be in the nature of operating income. Thus, not exclude able while determining the operating profits. The impugned order of the Tribunal places reliance upon the orders of is Coordinate Bench in Income Tax Appeal Nos. 2414/M/2013 in the case of Zee Entertainment Enterprises Pvt. Ltd., rendered on 6th August, 2014 - wherein it was held that provisions of writing back were to be considered as operating revenue, if an uniform approach is adopted unless of course, any contrary material is brought on record. (ii) The aforesaid decision of the Tribunal i....