9911796707
TMI Blog2014 (11) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... as a joint venture in 1988. Subsequently, in April, 1999, it became a subsidiary of Degussa A.G., Germany, which holds 68.25% of the shares in the assessee company. The assessee is engaged in the business of manufacturing and sale of silica. During the year under consideration, it entered into international transactions with three of its associated enterprises, namely, Degussa AG, Germany; J.J. Degussa Chemicals, Indonesia; and J.J. Degussa Chemicals, Philippines. These international transactions were on account of export of silica with sale value of Rs. 5,12,00,053/-. The assessee benchmarked these international transactions by using Comparable uncontrolled price (CUP) as the most appropriate method. On comparison of the rates charged by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal before the ld. CIT(A), the assessee raised additional ground to the effect that Transactional net margin method (TNMM) should be adopted as the most appropriate method for computing the arm's length price (ALP). The ld. CIT(A) remitted the additional ground along with the necessary documents to the TPO for comments. The TPO, vide his remand report dated 13.09.2011, objected to the admission of additional ground and contended that the same be rejected. Taking into consideration the Special Bench decision in the case of Quark Systems Pvt. Ltd. Vs. ITO 2010-TIOL-31-ITATCHD- SB, the ld. CIT(A) admitted the assessee's additional ground. The assessee contended that the internal TNMM should be applied to benchmark the international transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate method in its order for the AY 2002-03 because in that year also, like the current year, there were international transactions with Degussa AG, Germany and no transactions with non-AEs situated at Germany were undertaken by the assessee. These facts indicate that the facts and circumstances of the instant year are, mutatis mutandis, similar to those for the assessment year 2002-03. We have perused the order dated 05.08.2011 passed by the Tribunal in assessee's case for the AY 2002-03, a copy of which has been placed on record. In such earlier year also, the assessee applied the CUP method for benchmarking its international transactions. It was contended before the Tribunal that no exports were made to any uncontrolled parties in South ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the entire matter for fresh determination of the ALP, by applying an appropriate method, stood restored. 5. The contention of the ld. AR that the viewpoint taken by the ld. CIT(A) in adopting TNMM should be upheld, in our considered opinion, is not capable of acceptance at this stage. The larger question before us is not only the application of a particular method for determination of ALP, but also the calculation part. It can be seen from the impugned order that in order to demonstrate that the price charged from its AEs was at ALP, the assessee created segmental accounts. It is not a case where the assessee had prepared separate accounts in respect of different segments, which were produced before the TPO during the course of original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o later years from the consistent stand taken by him in the immediately preceding four years up to A.Y. 2006-07 in following the CUP method, is not available on record. There may have been some change in the factual position necessitating the adoption of TNMM in these later years. Further, the mere fact that the TPO adopted TNMM in a later year can be no ground to argue before the tribunal that the same method be followed in a preceding year, which stand has been specifically rejected by him in the instant years. As such, we cannot uphold the application of TNMM on this reason alone, more specifically, when in the immediately preceding year, where the facts are admittedly similar, the tribunal has restored the matter to the TPO for de novo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the AO for comments. No objection was taken by the AO to the correctness of the nature of amount in the remand report. Under such circumstances, we are of the considered opinion that the view taken by the ld. CIT(A) in allowing deduction for the full amount, which was incurred for the maintenance of office on monthly basis, does not require any interference. This ground is not allowed. 10. The last ground of this appeal is against the deletion of addition out of Rs. 88,000/- made by the AO on account of ISO certification fee paid by the assessee. The assessee paid a sum of Rs. 88,000/- towards ISO certification fee. Considering certain judgments, the AO came to hold that the assessee acquired an enduring advantage by getting approval ..... X X X X Extracts X X X X X X X X Extracts X X X X
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