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TMI Blog2022 (8) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... services were identified by the learned Transfer Pricing Officer. The learned CIT(A) following the decision in case of CIT vs. L'Oreal India Pvt. Ltd [ 2015 (2) TMI 407 - BOMBAY HIGH COURT] confirmed that in case of assessee, resale price method is the most appropriate method for benchmarking of international transaction. A categorical finding was given that the advertisement publicity and business development expenses are not at all related to the distributor function of purchase and sale of online media transaction. The finding was also given that assessee is a startup company and is expanding its operations in India, therefore, It incurred such expenses for increasing its valuation. The above findings are not controverted by the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and in law, the Ld. CIT (A) erred in holding that the Resale Price Method (RPM) was the most appropriate method for determining the arm's length price of the assessee's international transaction in respect of purchase and sale of online advertisement space ignoring the fact that the assessee was providing value added services; that the assessee was helping in creating intangibles like brand value of AE by incurring advertisement and publicity expenses; that services rendered by comparable companies chosen by the assessee are not similar to that of the assessee. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the assessee does not provide value added services without gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Fact shows that the assessee has entered into the transaction with its associate enterprises in US for purchase and sale of online advertisement space. Assessee adopted the resale price method as the most appropriate method taking the profit level indicator of GP ratio and itself as tested party identified four different comparables. The margin of the comparables was determined at arithmetic mean of 14.73% and margin of the assessee was computed at 18% and submitted that the transaction is at arm s length price. 04. For the justification of Resale Price Method (RPM) as most appropriate method, assessee submitted that it performs only distribution function and does not add any significant value to the products. It does not own any intan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the order of the learned CIT(A) suffers from infirmity. 08. Despite notice to the assessee, none appeared. This is the fate of earlier notices also. In view of this, appeal is decided in absence of the assessee as per information available on record and on the merits of its facts. 09. We have carefully considered the rival contentions of the learned Departmental Representative and perused the orders of the lower authorities. The assessee is primarily in the business of buying and selling of online advertisement space and act as a distributor. The Function, Assets and Risk ( FAR ) analysis placed before the lower authorities also show that assessee is acting as a distributor. Therefore, resale price method generally should have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case. 012. On careful consideration, we also find that the facts in the case of the assessee for A.Y. 2012-13 are also identical to the facts of 2011-12. The dispute is also with respect to most appropriate method adopted for determination of arm s length price. As for A.Y. 2011-12, we have already confirmed the order of the learned CIT(A) holding that resale price method is the most appropriate method for benchmarking arms length price of distributor function of the assessee. Accordingly, for the reason given by us therein, we dismiss the appeal of the learned Assessing Officer. 013. In the result, the appeal of the learned Assessing Officer for A.Y. 2012-13 is also dismissed. 014. In the result, both the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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