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TMI Blog2017 (7) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... business of the Assessee - The functional profile of the Assessee for the AY in question i.e. AY 2004-05 has not changed in the subsequent AYs i.e. 2007-08 to 2010-11. The TPO has in each of the subsequent AYs i.e. 2007-08 to 2010-11 accepted the TP Study .of the Assessee insofar as the determination of ALP for the Class T Class II segment international transactions are concerned. Consequently, the Court is unable to accept the plea of the Revenue in the present case that the Court should proceed on the assumption that the Assessee had changed his business profile and functions. If there is, in fact, no change in the business profile of the Assessee in all these years i.e. in AY 2004-05 as well as subsequent years, there is no warrant for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies Act 1956, is primarily engaged in the business of manufacturing, importing and selling of sunglasses and prescription frames in India besides exporting raw and semi finished sunglass frames to Luxottica Group. 44.15% shares of the Appellant company are held by Ray Ban Indian Holdings Inc. USA, which in turn is indirectly held 100% by Luxottica Group SPA Italy. It is not in dispute that the Luxottica Group is the Associated Enterprise ('AE') of the Appellant. 4. In the Transfer Pricing Study, ('TP Study') submitted by the Appellant before the Transfer Pricing Officer (TPO) it set out the following classification of the functions and international transact undertaken by it with its AE during the AY in question: Class Nature of Inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 17th November 2006, the TPO held that the CUP method is the most direct and reliable method for the Class I segment transaction and that the Re-sale Price Method (RPM) is the MAM for determining the ALP of the transactions under Class II segment. On that basis, the TPO recommended the additions to be made to the returned income of the Assessee. 8. On the basis of the order of the TPO an assessment order was passed, aggrieved by which the Appellant went before the Commissioner of Income Tax (Appeals) [GIT (A)]. Before the CIT(A) the following questions were urged by the Appellant: "i Whether the reference made by the AO to the TPO is bad in law making the TPO's order void-ab-initio Also, whether the mechanical acceptance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the CIT (A). 12. In para 5 of the impugned order it is observed by the ITAT that:- "As the Id. CIT(A) has also upheld the application of CUP as the most appropriate method, which aspect has not been challenged by the Assessee, we hold that the TPO was right in applying the CUP method for determining the ALP of the international transaction of import of raw materials, components and semi finished goods...." 13. In para 12 of the impugned order, the ITAT observes:- "The TPO applied the RPM, which has not been disturbed by the ld. CIT(A) and further there is no challenge to it by the Assessee. In our considered opinion, the RPM is quite a useful method where the goods purchased by the Indian sold without doing any value enhanceme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent to the AY in question, the Revenue had accepted the said Assessee's adoption of a certain method as the MAM for working out the ALP of international transactions for the purposes of transfer pricing. 18. Mr. Zoheb Hossain, learned Senior Standing Counsel for the Revenue submitted that the rule of consistency was relevant for later years whereas in the present case it was sought to be argued that the assessment of an earlier year should not be disturbed in view of the orders in the subsequent years. According to Mr. Hossain an important issue that required to be examined in the present case was whether the type of transaction in the preceding years as well as in the subsequent years were similar and whether there was a change in the fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears i.e. in AY 2004-05 as well as subsequent years, there is no warrant for the Court to uphold the order of the ITAT remitting the matter to the TPO/AO or for this Court to remand the appeal to the ITAT for a fresh consideration. That will be a sheer waste of time and would serve no purpose. 21. There is one more issue raised by the Revenue regarding transfer by the Assessee of its advertising, marketing and promotion (AMP) functions to its AE. However, that is not the subject matter of the present appeal. It is pointed out by Mr Rao that the said issue is still pending at various levels in the subsequent years. 22. Questions (i) and (ii) are answered in the affirmative i.e., in favour of the Assessee and against the Revenue. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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