9911796707
TMI Blog2013 (7) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... l (DRP), Ahmedabad dated 25-9-2012. 2. The grounds raised by the assessee are as under:- On the facts and in the circumstances of the case and in law, the Assessing Officer ('AO') grossly erred, in conformity with the directions of Hon'ble Dispute Resolution Panel ('DRP'), Ahmedabad under section 144C(5) of the Income-tax Act, 1961 ('the Act'), in making the upward transfer pricing adjustment of ₹ 15,87,39,602/- in respect of appellant's international transaction of sale of medical kits (comprising generic pharmaceutical products, hospital supplies and disposables) to its associated enterprise ('AE') Missionpharma A/S, Denmark ('MPAS'). The appellant submits that no transfer prici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in facts, by considering IDA Foundation Netherlands (a 'not for profit organisation'), as comparable to the AE (i.e. MPAS) for the purpose of economic analysis. vi. The Hon'ble DRP/Ld.TPO/Ld. AO erred, in law and in facts, in not considering and not making appropriate adjustments for functional, risk and economic differences between the AE (i.e. MPAS) and IDA Foundation Netherlands (a 'not for profit organisation'). vii. The Hon'ble DRP/Ld.TPO/Ld.AO erred, in facts and in law, by not considering that fresh search process conducted by Ld. TPO is unsystematic, vague, erroneous and results into only one alleged comparable and thereby defies the statutory provisions including the proviso to section 92C(2) allowi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in paragraph 17 of the Tribunal's order, it was noted by the Tribunal that two issues are to be decided by the Tribunal, i.e, (1) Selection of the tested party, whether it should be the assessee or the 'AE'. (2) Selection of the comparables. He further submitted that regarding the first issue, i.e., Selection of tested party, it was held by the Tribunal that the assessee is least complex party as compared to the AE, and hence, the assessee should be selected as a tested party and regarding the second issue, i.e., selection of comparable, it was held by the Tribunal that IDA Foundation, Netherlands cannot be accepted as a comparable because this company is not working for profit motive and out of total 9 local comparables select ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal order in assessee's own case for earlier two years. 5. We have considered the rival submissions and we find that the DRP and TPO has adopted the AE as tested party and IDA Foundation Netherlands as comparable and on both these aspects, as per the Tribunal order in assessee's own case for earlier years, the assessee has to be accepted as a tested party and IDA Foundation, Netherlands cannot be accepted as a comparable. Out of six comparables noted by TPO at page No.4 of his order, the arithmetic mean was 3.44% and the same is within +5% range of the assessee's profit margin. Admittedly, out of these six comparables, two are common in the present year and earlier year and therefore, these two are acceptable as per learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng export turnover, this issue is squarely covered in favour of the assessee by the tribunal decision in the assessee's own case for earlier two years, therefore, we hold that this company is acceptable as a comparable. Because of this reason that out of 6 local comparables noted by the TPO at page No.4 of his order, one is acceptable, i.e. Shamrock Industrial Ltd. and one is not acceptable because of high RPT, i.e., Aditya Mediasales Ltd., we do not examine the acceptability of other comparables because whether the others are accepted or not accepted, it will not have impact on our decision because none of these comparables is having profit margin at the rate of higher than the profit margin of the assessee company. We, therefore, hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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