9911796707
TMI Blog2014 (3) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken as the costs incurred by the assessee and not the FOB value of goods between third party enterprises sourced through the assessee - the tested party should be the assessee and not it's A.E. Transfer pricing adjustment on account of ALP – International transaction of provision of sourcing support services – Services provided to AE - Held that:- The 'total cost' in the denominator will stand changed to the 'total cost' incurred by the assessee instead of the FOB value of goods between third party enterprises - necessary details for the determination of ALP with the correct base of the assessee as well as comparables are not readily available on record – thus, the matter is remitted back to the AO for fresh adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of high volume, time sensitive, and consumer goods. The assessee was compensated with charge for the buying services at cost plus markup of 5%. The assessee reported international transactions to the tune of Rs. 62,78,77,646/- in the nature of `Service fee received'. The assessee adopted Transactional Net Margin Method (TNMM) as the most appropriate method with Profit Level Indicator (PLI) of Operating Profit/Total Cost (OP/TC). The assessee declared its OP/TC of 7.56% as against mean OP/TC of 53 comparables at 8.32%. It was claimed that its margin was within the 5% range and hence the transactions should be considered at ALP. The TPO observed that the assessee was allowed commission @ 5% of cost incurred for its sourcing activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct base in the PLI. 5. It has been brought to our notice that that the TPO in the preceding year also applied the same base of 'total cost' as in the year under consideration, which got the approval from the Tribunal. The assessee assailed the Tribunal order before the Hon'ble High Court. Vide its judgment dated 16.12.2013 in Li Fung (India) Pvt. Ltd. Vs CIT, a copy which has been placed on record, the Hon'ble Delhi High Court has reversed the Tribunal order by holding the FOB value of goods between the third party enterprises, sourced through the assessee, was not in accordance with the law. In view of the enunciation of law by the Hon'ble jurisdictional High Court in the case of the assessee itself, there remains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing of depreciation of computer peripherals @ 15% as against 60% claimed by the assessee. The Assessing Officer made disallowance of Rs. 9,20,701/- on account of depreciation of computer peripherals by reducing the rate of depreciation to 15% as against 60% claimed by the assessee. 8. Having heard both the sides on this issue, we find that this issue is now fairly settled in favour of the assessee in view of the Special Bench order passed in the case of DCIT Vs Datacraft India Ltd. (2010) 133 TTJ (Mum) (SP) 377. We, therefore, hold that the authorities below were not justified in reducing the rate of depreciation on computer peripherals. This ground is allowed. 9. In the result, the appeal is partly allowed. Assessment Year 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
