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TMI Blog2012 (12) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... that Vega UAE is carrying both the inventory risk as well as credit risk. This finding is given by the Tribunal after examining the facts of the present case. Also, clear finding given by the Tribunal that assessee company has entered into a valid and proper distribution agreement with Vega UAE and had been adhered to also. Hence, it is not proper to say that this issue was not discussed and decided. Hence, Revenue in M.A. has not established any apparent mistake in the Tribunal’s order and therefore, no rectification in this Tribunal’s order is called for u/s 254(2) - M.A. No.106/Ahd/2012 - - - Dated:- 20-7-2012 - Shri, D. K. Tyagi and Shri A. K. Garodia, JJ. By Appellant Shri Roopchand JCIT D.R. By Respondent S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et service provider and merely on this basis, the TP analysis conducted by the assessee had been rejected by the TPO." It has further observed that, "Regarding this aspect that as to whether Vega UAE is a distributor or simply marketing serviceprovider, we find that the objection of the revenue on this aspect is not sustainable in view of the facts of the present case because we find that the assessee company has executed proper distributor agreement with Vega UAE and it has been adhered to also and since the objection of the revenue that Vega UAE is not bearing any inventory and credit risk, we find that as per the facts of the present case, both these objections are not correct and Vega UAE is carrying both the inventory risk as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tested party has been upheld by the ITAT or not. 8. At para 21, the ITAT has observed that once Vega UAE is taken to be a distributor, ALP has to be determined on the basis of profit on sale of goods. This is a wrong presumption which has been adopted without any discussion. For a distributor, the general yardstick or profit level indicator is return on cost. In OECD guidelines, at para 1.47, the guidelines state that, "1.47 The functions carried out (taking into account the assets used and the risks assumed) will determine to some extent the allocation of risks between the parties, and therefore the conditions each party would expect in arm's length transactions. For example, when a distributor takes on responsibility for marketi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h process carried out in this case, rather than deleting the proposed adjustment. 12. The above mistake is apparent from records, therefore it is requested that the Hon'ble Tribunal may rectify the mistake and pass necessary order accordingly. 2. In the course of hearing of the M.A., ld. D.R. of the Revenue reiterated the same contentions which are raised in the M.A. As against this, it was submitted by the ld. A.R. of the assessee that there is no apparent mistake in the Tribunal s order which can be rectified u/s 254(2) and request of the Revenue is amounting to review of the Tribunal s order, which is not permissible u/s 254(2) of the IT Act. 3. We have considered the rival submissions and gone through the impugned Tribunal s ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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