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TMI Blog2019 (2) TMI 1449X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was no difference in two segments involved for transfer pricing. Thus, consistently accepting the TNM method as the most appropriate method to determine the ALP of the respondent's aggregated International Transaction till Assessment Year 2015-16. The Revenue has not been able to show any material difference in the subject assessment year which would justify a change in the most appropriate method (TNM method) adopted while benchmarking the international transactions. So far as the order dated 1st August, 2018 of this Court in case of John Deere India (P) Ltd. [2015 (3) TMI 318 - ITAT PUNE] admitting the appeal of the Revenue is correct, we find that it has not been admitted on the question which arises in the present peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act, 1961 (the Act), challenges the order dated 8th October, 2015 passed by the Income Tax Appellate Tribunal (the Tribunal). This Appeal relates to Assessment Year 2005-06. 2. The Revenue urges the following question of law for our consideration: Whether on the facts and in the circumstances of the case and in law, was the Tribunal right in directing Transfer Pricing Officer (TPO) to use Transactional Net Margin Method (TNM Method) to determine the Arms Length Price (ALP) of the respondent's International Transactions on the ground that it is the most appropriate method as it is consistently accepted/adopted by the Revenue? 3. The respondent is engaged in the manufacturing of resistors and capacitors. The manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making Transfer Pricing Adjustment not on the basis of aggregated international transaction on application of TNM method but on application of RPM method for imports and CPM method for exports. 5. Being aggrieved the respondent filed a further appeal to the Tribunal. In appeal the Tribunal in the impugned order observed the fact that the TNM method on the aggregated international transaction has been consistently applied by the Revenue in determining the ALP of the respondent's International Transactions with its AE's. It noted that the assessment year 2006-07 to assessment year 2008-09 the TPO had adopted the TNM Method on the aggregated International Transaction as the most appropriate method for benchmarking the respondent-as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns why it had adopted the TNMM method and had also explained the difference between the exports made to the associate enterprises and non-associate enterprises and also sales made in the domestic market. The assessee has also explained the functional risks which are different for both the segments and consequently, no comparison could be made on the gross profit level, as adopted by the TPO for benchmarking international transactions of the assessee with its associated enterprises. The explanations of the assessee have been rejected by the TPO/CIT(A) without any basis, wherein similar explanation has been accepted by the TPO itself in all the other years. The conduct of the business and the products manufactured are identical in the year un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order on the decision of its coordinate bench in the case of John Deere India (P) Ltd. Vs. DCIT reported in ITA No.1476/PN/2010 decided on 20th February, 2015 has been challenged by the Revenue before this Court in Income Tax Appeal No.1372 of 2015 and the same has been admitted on 1st August, 2018. Therefore, this appeal also requires admission. 7. Mr.Joshi, learned counsel opposing the appeal supports the impugned order and submits that no interference is warranted. It is further pointed out that TPO has accepted the TNM method the most appropriate method in determining ALP of the respondent's transaction with its AE's till the assessment year 2015-16. Further, the objection before the revenue has been dealt with by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the facts or law. This is not the issue on which the appeal of the revenue has been admitted by the Court in the case of John Deere India (P) Ltd. (supra). Therefore, it will have no application to the present facts. The objection to rejection of comparables taken by the Revenue before us, does not address the issue of the most appropriate method for benchmarking its international transaction. We are also unable to understand the contention on behalf of the Revenue that it is for the respondent to prove that there is no change/ difference in facts in the subject Assessment Year from the subsequent Assessment Years. Where TNM method is accepted to determine the ALP of international transaction. Infact, no change in facts has been asserte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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