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TMI Blog2023 (4) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer (AO) pursuant to the directions of Learned Dispute Resolution Panel-2, Bengaluru [DRP]. The facts as well as issues are stated to be pari-materia the same. This is a second round of litigation before us since the matter, in the first round, was remitted back by Tribunal in ITA Nos.779/Mds/2014 & 801/Mds/2015 & 810/Mds/2016 vide common order dated 21-09-2016 as under: - "5. We have considered the contentions. In our opinion, the APA has considerable bearing for the years under appeal, since prima facie, the rollback of four years which went to assessment year 2011-12, was curtailed to three years. Obviously, the curtailment was allowed in the APA after considering the submissions of the assessee that it had become a contract manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al restored the matter back by observing that the assessee entered into an Advance Pricing Agreement (APA) and nature of business of the assessee would have considerable bearing on the Arm's Length Pricing Study. 2.2 In the second round, the assessee sought various economic adjustments while computing its margins. However, Ld. TPO held that the assessee was a contract manufacturer whereas the assessee claims that it is a risk bearing contract manufacture. The Ld. TPO held that the claim that the assessee was a risk bearing manufacturer would not have any relevance for determination of ALP since the assessee bears the same risk as borne by any other contract manufacturers. It was noted that the assessee was retaining 90% of invoice value wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng cost of 6.25% or operating profit computed considering 100% of the sale consideration receivable by the AEs from their customers for the goods invoiced by the assessee to its AEs. As evident from the functional profile of the assessee, it proposes to operate on a full cost markup basis and therefore, would not be exposed to various risks. Applying the same formulae, the TP adjustments, for all these years could be computed as under: - Particulars F.Y. 2008-09 FY 2009-10 FY 2010-11 Total adjustment TP Adjustment as per TP order 209,468,528 139,708,685 255,853,091 605,030,304 Revenue (A) 169,655,269 1,212,030,169 1,853,036,932 Total unadjusted cost (B) 359,459,550 1,310,802,808 2,089,867,555 Adjustment cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to the earlier order of Ld. TPO in first round and submitted that the assessee was to be remunerated at cost-plus mark-up and therefore, no economic adjustments could have been granted to the assessee. The Ld. CITDR also submitted that the terms of APA were not applicable in these years and therefore, the orders of lower authorities were to be confirmed. Having heard rival submissions and after perusal of case records, our adjudication would be as under. 5. We find that the basic factual matrix is not under dispute. The assessee works as a contract manufacturer and supplies goods to its AE (GLO), who, in turn, sells it to an independent customer i.e., Nike. The revenue is shared to the extent of 90% by the assessee whereas balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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