9911796707
TMI Blog2021 (4) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Hon'ble Dispute Resolution Panel-l, (hereinafter referred to as the 'Hon'ble DRP') on the following grounds, each of which are without prejudice to one another. On the facts and in the circumstances of the case and in law, the learned AO/ Additional Commissioner of Income-tax (Transfer Pricing) - 1 (2) ('TPO') on fact and in law has: General 1. erred in assessing the total income at Rs. 28,42,18,200 as against returned income of Rs. 23,12,12,830 computed by the Appellant. TRANSFER PRICING ADJUSTMENTS General 2. erred in making following adjustments to the total income of the Appellant under Section 92CA(3) of the Act on account of adjustment in the arm's length price of the international transaction, using Comparable Uncontrolled Price ('CUP') as the most appropriate method: a) of Rs. 39,20,644 vis-a-vis the transaction of export of finished goods to AEs b) of Rs. 4,90,84,731 vis-a-vis the transaction of payment for marketing, administrative, logistics support and information technology services availed from AEs. I. EXPORT OF FINISHED GOODS TO ASSOCIATED ENTERPRISES ('AEs') Rejection of the economic analysis un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied as CUP for determining the arm's length price of export sales. It is fairly well settled, CUP method requires strict comparability. It cannot be denied that the pricing of a product varies on the basis of geographical location. Thus, primarily, the price of products sold in domestic market cannot be compared with the price of the product sold in foreign country due to various factors. Therefore, if the Transfer Pricing Officer selects CUP as the most appropriate method to benchmark the transaction, it is his duty to find out and bring on record price charged for uncontrolled transactions carried out under similar circumstances. If, suitable comparable uncontrolled transaction is unavailable, CUP method cannot be applied. 16. It is further noticed, during the year under consideration assessee had sold 34 different products to both overseas AEs as well as domestic unrelated parties. Out of the 34 products sold, Transfer Pricing Officer has accepted the price of 16 products sold to AEs to be at arm's length, since, the price charged to AEs is more than the price charged to non-AEs. In case of 18 products only the Transfer Pricing Officer has made adjustment as the price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasonable opportunity of hearing to the assessee. The ground no. 1 is allowed for statistical purpose. 7. In ground No.II, the assessee has challenged the adjustment made on account of payment made towards intra group services in respect of marketing, administrative, logistic support and information technology services. 8. The Ld. Counsel of the assessee submitted that the identical issue has been decided by the co-ordinate bench of the Tribunal in assessee's own case for A.Y. 2011-12 in ITA No.991/M/2016 and therefore the current issue may also be decided on the same line. 9. The Ld. D.R. fairly agreed to the arguments of the Ld. A.R. however relied on the orders of authorities below. 10. We have heard the rival submissions of both the parties and perused the material on record. We find that the identical issue has been decided by the co-ordinate bench of the Tribunal in ITA No.991/M/2016 (supra) in assessee's own case in A.Y. 2011-12 vide para No.25, 26 & 27 which are reproduced as under: "25. We have considered rival submissions and perused the material on record. Undisputedly, the assessee has entered into two separate agreements with group entities for availing ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction to demonstrate that the price charged by the assessee is not at arm's length. On the contrary, it is telltale from the order of the Transfer Pricing Officer that he has proceeded to benchmark the transaction purely on estimate basis by applying man-hour salary rate of a single employee in case of marketing, administrative and logistic services. Similar is the situation in case of IT services, wherein, the Transfer Pricing Officer has estimated the arm's length price at 30% of the amount paid. 26. The aforesaid method of estimating the arm's length price is not in terms with the provisions contained under section 92C r/w rule 10B, hence, opposed to law. Though, both the Transfer Pricing Officer and learned DRP have alleged that the assessee has not substantiated the fact that the services were actually rendered and benefit accrued to the assessee, however, the very fact that the Transfer Pricing Officer has allowed a part of the payment made towards Intra group services, though on estimate basis, clearly indicates that even the Revenue accepts that services indeed were received by the assessee and the assessee also benefited from them. It is a fact on record th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
