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TMI Blog2018 (7) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... - 28-6-2018 - Dr. Vineet Kothari And Mrs. S. Sujatha, J.J. Sri. Aravind K V, Adv.- For the Appellant JUDGMENT This Appeal is filed by the Revenue purportedly raising substantial questions of law arising from the Order of the Income Tax Appellate Tribunal, Bangalore Bench B , Bangalore, in IT [TP] A No.108/Bang/2015 dated 30.06.2016, relating to the Assessment Year 2010-11. 2. The proposed substantial questions of law framed by the Revenue in the Memorandum of Appeal is as under: 1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in confirming the direction of the DRP with regard to payment of Royalty to its associated enterprises whereby the DRP had set aside the TPO findings tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee did not derive any benefit from the AE for which payments were made, we have considered the submissions of the learned counsel for the assessee. This issue is purely academic because we have already held that the conclusions of the TPO/DRP that the trading and manufacturing segment of the Assessee are distinct and not inter related warranting combined transaction approach is not correct and that a combined transaction approach has to be adopted and that on the basis of combined transaction approach the price paid for the international transaction is at Arm s Length. We may also that legally the TPO should adopt the ALP as nil. On similar approach by TPO adopting ALP at Nil the IT At, Bangalore Bench, in the case of M/s. Festo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions for them and the examination of a controlled transaction should ordinarily be based on the transaction as it has been actually undertaken and structured by the associated enterprises. The guidelines discourage re-structuring of legitimate business transactions except where [i]the economic substance of a transaction differs from its form and [ii]the form and substance of the transaction are the same but arrangements made in relation to the transaction, viewed in their totality, differ from those which would have been adopted by independent enterprises behaving in a commercially rational manner. The OECD guidelines should be taken as a valid input in judging the action of the TPO because, in a different form, they have been recognized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... combined transaction approach in arriving at the ALP under the TNMM at entity level. The TPO proceeded to determine the ALP by treating the trading and manufacturing segments as separate transactions. 12. We have heard the learned Authorised Representative as well as learned Departmental Representative and considered the relevant material on record. At the outset we note that an identical issue has been considered by this Tribunal in Assessee s own case for the Assessment years 2003-04, 2007-08 and 2008-09. We further note that the TPO for the Assessment Year 2012-2013 has accepted the manufacturing and trading segment as integrated and combined transaction for the purpose of determining the ALP Under TNMM. 4. The controversy inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of law. 56. We are therefore of the considered opinion that the present appeals filed by the Revenue do not give rise to any substantial question of law and the suggested substantial questions of law do not meet the requirements of Section 260-A of the Act and thus the appeals filed by the Revenue are found to be devoid of merit and the same are liable to be dismissed. 57. We make it clear that the same yardsticks and parameters will have to be applied, even if such appeals are filed by the Assessees, because, there may be cases where the Tribunal giving its own reasons and findings has found certain comparables to be good comparables to arrive at an Arm s Length Price in the case of the assessees with which the assessees may ..... X X X X Extracts X X X X X X X X Extracts X X X X
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