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TMI Blog2023 (11) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... Services (P.) Ltd [ 2017 (11) TMI 1655 - DELHI HIGH COURT] held that once the ITAT, on considering the relevant facts as well as the order of the TPO, had concluded that the business of the assessee was merely that of a pure trader, and there was no value addition made before re-selling the particular products (i.e. the SIM cards), its consequent finding that RPM is the Most Appropriate Method, is irreproachable. Decided in favour of the assessee. - HON'BLE MR. JUSTICE RAJIV SHAKDHER AND HON'BLE MR. JUSTICE GIRISH KATHPALIA Present: For the Appellant/Revenue : Mr Ruchir Bhatia, Sr. Standing Counsel with Ms Deeksha. For the Respondent : Dr. Shashwat Bajpai, Mr Shashank Garg and Mr Mahir Khanna, Advocates. RAJIV SHAKDHER, J. (ORAL) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in this regard, as noticed above, relied upon the TNMM. 9. The Tribunal, however, has returned findings of fact in paragraphs 17 to 23 of the impugned order. 10. In a nutshell, the Tribunal has held that although the TPO and the DRP have observed that the respondent/assessee is a full-fledged risk-bearing distributor performing various functions and therefore the MAM is not RPM, no comparable instances have been brought on record by the TPO and the DRP. 11. Furthermore, the Tribunal has also found as a matter of fact (something that we have noted above), that the respondent/assessee resold the goods in the market without any value addition and therefore, the gross margin earned on such transaction was the only determinative factor for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Since the SIM cards are resold without making any value addition, the ITAT concluded that the assessee carried out purely trading business, and hence the RPM was the Most Appropriate Method for calculating arms length price. 8. This Court finds that once the ITAT, on considering the relevant facts as well as the order of the TPO, had concluded that the business of the assessee was merely that of a pure trader, and there was no value addition made before re-selling the particular products (i.e. the SIM cards), its consequent finding that RPM is the Most Appropriate Method, is irreproachable. In Nokia India (P)Ltd. v. Deputy Commissioner of Income Tax, (2015) 167 TTJ (Del) 243 , the Delhi bench of the ITAT held: A close scrutiny of the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he gross profit margin accruing in a comparable controlled transaction on resale of same or similar property or services. The RPM is mostly applied in a situation in which the reseller purchases tangible property or obtain services from an A.E. and reseller does not physically alter the tangible goods and services or use any intangible assets to add substantial value to the property or services i.e., resale is made without any value addition having been made. 11. This view has also been affirmed by the Bombay High Court in its judgment dated 07.11.2014 in Commissioner of Income Tax v. L Oreal India Pvt. Ltd. (ITA No. 1046 of 2012), where the Court found that there was no error in law committed by the ITAT when it held that RPM was the Most ..... X X X X Extracts X X X X X X X X Extracts X X X X
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