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TMI Blog2023 (2) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Rs. 99,31,763/- was made on account of computation of arm's length price of international transaction of import of finished goods rejecting the most appropriate method adopted by the assessee of resale price method, but the transactional net margin method adopted by the TPO. 02. The assessee has raised following grounds of appeal: "Based on the facts and circumstances of the case, and in law, Torrecid India Private Limited (hereinafter referred to as "the Appellant‟) respectfully craves leave to prefer an appeal against the order passed by National Faceless Assessment Centre, Delhi / learned Assessing Officer ("ld. AO") dated 16 February 2022/ learned Transfer Pricing Officer ("ld.TPO) in pursuance of the directions issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and in law, the id TPO erred in and the Hon'ble ORP further erred in upholding / confirming the action of the TPO in selecting the Transactional Net Margin (TMM) method, as the most appropriate method for benchmarking the international transaction of import of finished goods without providing any cogent reasons and summarily relying on the directions of Hon'ble DRP for AY 2013-14 The above grounds of appeal are mutually exclusive & without prejudice to each other. The appellant prays for appropriate relief based on the said grounds of appeal and the facts and circumstances of the case." 03. The brief facts of the case show that assessee is company engaged in manufacturing products for ceramic industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's trading segment margin was computed at (-) 8.62% and accordingly the adjustment of Rs. 99,31,763/- was made as per order under section 99CA(3) of the Act dated 27.01.2021. Accordingly, the AO made a draft assessment order u/s. 144C of the Act on 13.04.2021 where the total income of the assessee was determined at Rs. 99,31,760/-. 06. The assessee preferred objections before the ld. Dispute Resolution Panel, which issued direction on 18.01.2022 holding that the issue is identical which came up for direction before the DRP in A.Y. 2013-14 and therefore, same was followed. The learned DRP in its direction for A.Y. 2013-14 rejected the contention of the assessee holding that RPM is not acceptable as the most appropriate method rejectin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing activity. The international transaction shown by the assessee as under :- Serial number Nature of transaction Value of the transaction Most appropriate method selected by assessee 1 Import of raw materials from Torrecid SA, Al farben SA and Torrecid Suzhou 14,02,80,914 Transactional net margin Method taking foreign associated enterprises as tested parties 2 Import of raw materials from Chilches materials SA Torrecid Maxico 74,07,971 CUP 3 Import of finished goods from Torrecid SA and Digital Services Ceramics SL 29,09,58,928 Resale price method taking assessee as a tested party 15. Now there is no dispute with respect to the benchmarking of transaction stated at serial number 1 and 2 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods importing the same from the associated enterprises and (2) manufacturing of certain products in India for which it imports raw material from associated enterprises. The learned DRP also confirmed that assessee is maintaining segmental financial results of up to level of gross profit. It also recorded a fact that assessee is not in the business of trading only but also in the business of manufacturing. However it held that it cannot be said that assessee is only engaged in business of resale of finished products imported from the associated enterprises, as it is also engaged in manufacturing activities, therefore learned that DRP upheld the action of the learned TPO in rejecting the resale price method adopted by the assessee and trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pute resolution panel in rejecting reliance on the decision of the honourable Bombay High Court in case of L'Oreal India (P.) Ltd. (supra) is also not proper. The finding of the learned dispute resolution panel that in that case that assessee was engaged only in trading activities is clearly an incorrect fact recorded by the learned dispute resolution panel, which can be gathered from the coordinate bench decision L'Oreal India (P.) Ltd. (supra), which was challenged by the revenue before the honourable Bombay High Court. Thus, in that case honourable Bombay High Court in case of an assessee who was engaged in the business of manufacturing and trading in cosmetics held that for the trading activities in cosmetic segment, adoption of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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