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TMI Blog2023 (8) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... sistency, we deem it just and proper to follow the decision of the Co-ordinate Bench of the Tribunal and restore the issue to the file of AO/TPO to consider the RPM as the MAM and take a view on the necessity of any adjustment towards ALP for distribution function, after hearing the assessee Appeal of assessee is treated as allowed for statistical purposes. - ITA-TP No. 295/Hyd/2023 - - - Dated:- 27-7-2023 - Shri Rama Kanta Panda, Vice President And Shri K. Narasimha Chary, Judicial Member For the Assessee : Shri D. Prabhakar Reddy, AR For the Revenue : Shri K.E.Sunil Babu, CIT-DR ORDER PER K. NARASIMHA CHARY, JM: Aggrieved by the final assessment order dated 30/03/2023 passed consequent to the directions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added the same to the income of the assessee, which had the effect of enhancing the addition. 4. Aggrieved thereby, assessee preferred appeal before the Tribunal and the Tribunal by order dated 04/09/2020 in ITA No. 160/Hyd/2017, remanding the issue to the file of learned Assessing Officer/learned TPO to conduct a fresh TP analysis by treating the disputed transaction as a distribution agreement. 5. Pursuant there to learned Assessing Officer/learned TPO by order dated 29/01/2022, considered the transaction as distribution transaction as directed by ITAT and adopted Transactional Net Margin Method (TNMM) as the Most Appropriate Method (MAM) for benchmarking such a transaction and proposed adjustment. 6. Aggrieved thereby, assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cost of sales and other charges and such adjusted margin should be compared to a comparable un-controlled resale transaction. Sum and substance of the argument on behalf of the Revenue is that when there is no purchase, there cannot be any resale and for that simple reason, RPM is not an appropriate method. According to the learned DR, under the agreement, the assessee is receiving the goods for free of cost, incurring certain expenditure and distributing the goods for a particular price and all this constitutes a service under the agreement and there is no profit element or the margin involved here. Learned DR, therefore, submits that unless there is a purchase price and margin, the ALP of the margin cannot be determined by taking into c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opy of the order dated 18/04/2023 in ITA No. 282/Hyd/2022, for the assessment year 2011-12 in assessee s own case, is furnished before us and the same part of the record. In the said appeal also, the assessee challenged the findings of the learned DRP stating that the learned DRP committed error in not appreciating the fact that the transfer pricing regulations cannot be applied to the distribution activity or service provided when no payment was made to the AE towards software licenses and also in rejecting the RPM as the most appropriate method and selecting TNMM in its place for determination of ALP for distribution activity. 12. On a perusal of the order dated 18/04/2023 in ITA No. 282/Hyd/2022, for the assessment year 2011-12 in ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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