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TMI Blog2014 (7) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... such - The title in the goods is held by the assessee for some time - assessee deals on a principle to principle basis - the activity cannot be bracketed with the activity of a commission agent or a broker - the activity in question is akin to trading activities. There was no infirmity in the reasoning of the Tribunal that transactions are akin to trading and cannot be considered activities of a commission agent or a broker - appropriate comparables would have to be considered for determination of the ALP - entities which are similarly placed as the assessee including in respect of their functional and risk profile as well as working capital exposure would be chosen as comparables – thus, there is no reason to interfere in the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany. 4. The TPO rejected the Profit Level Indicator (PLI) used by the assessee to bench mark its international transactions which was a ratio of net revenue and operating expenses. The sales and cost of sale had been excluded by the assessee. The TPO computed the Arm s Length Price (ALP) by assuming a margin of 19.6% and by its order dated 29.10.2009 held that income of the assessee was to be enhanced by a sum of ₹ 1,55,27,14,989/-. 5. The Assessing Officer made a draft assessment order on 31.12.2009, which was not accepted by the assessee and the assessee filed its objection before the Dispute Resolution Penal (DRP) under Section 144C of the Act. By an order dated 30.09.2010 , the DRP rejected the objections preferred by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was claimed by assessee that the cost of goods sold should not be taken into consideration while computing the profit margins which should be calculated on the operating costs and the appropriate ratio to be considered for comparing with other entities would be the ratio of net revenue to operating costs. 9. The said contentions had also been advanced by the assessee before the ITAT. In the alternative, the assessee had submitted, before the ITAT, that if the transactions of buying and selling were considered to be trading then the ALP should be determined in comparison with companies which were similarly situated. 10. The Tribunal had considered the submissions of the assessee and held as under: - 10. The second ground of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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