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TMI Blog2024 (5) TMI 1096X X X X Extracts X X X X X X X X Extracts X X X X ..... of income on 29/03/2019, declaring income of Rs. 44,00,853/-. 3. In view of the international transactions entered into by the assessee during the financial year 2017-18, determination of Arm's Length Price (ALP) was referred to the learned Transfer Pricing Officer (learned TPO) and by order dated 31/07/2021, learned TPO proposed adjustment of Rs. 8,07,70,470/- out of which, a sum of Rs. 7,49,68,097/- was towards manufacturing activity; whereas other adjustments are in respect of interest expense on CCDs and trade receivables. 4. Aggrieved, assessee preferred objections before the learned DRP. Learned DRP by order dated 30/06/2022, issued directions pursuant to which the final assessment order was passed adding the adjustments as originally proposed by the learned TPO. Hence, this appeal by the assessee. 5. Though the appeal is preferred on various grounds, at the time of arguments, learned AR not pressed all the grounds, except grounds relating to the issues of non-consideration of segmental information, non-consideration of TNMM (Transactional Net Margin Method) as MAM (Most Appropriate Method) for transactions related to manufacturing segment, non-consideration of RPM as MAM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be considered. He placed reliance on the decision of a Co-ordinate Bench of the Tribunal in the case of TPSC (India) Private Limited vs. DCIT, in ITA-TP No. 225/Hyd/2022, dated 18/03/2024 in support of his contentions. 10. Learned DR, on the other hand, submitted that the learned DRP recorded a finding that the assessee did not provide audited segmental data for AEs and non-AEs separately to facilitate the verification of cost allocation between the segments and to compute the profits attributable to AE transactions and, therefore, the learned DRP is justified in holding that entity level comparison is best suited in the facts of the case. 11. On a careful perusal of the record, we find that the assessee provided the CMA certified segmental information derived from the audited segment reporting disclosures of the annual financial statements and such details could be found in the Paper Book. Further, in the case of TPSC (India) Private Limited (supra), a Co-ordinate Bench of the Tribunal followed the decision of the Hon'ble Bombay High Court in the case of CIT vs. Tara Jewels Exports (P.) Ltd., [2017] 80 taxmann.com 117, wherein also a similar question of restricting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015, followed the same procedure. Learned DR placed reliance on the orders of the Revenue authorities. 16. We have gone through the record in the light of the submissions made on either side. In terms of Rule 10B(1)(e)(2) and Para 3.27 of OECD guidelines, internal comparables may have a more direct and closer relationship to the transaction under review than external comparables, the financial analysis may be easier and MAM reliable as it will presumably rely on identical accounting standards and practices for the internal comparable and for the controlled transaction, and in addition, access to information on internal comparables may be both more complete and less costly. 17. In the case of Palred Technologies Ltd. (supra), a Co-ordinate Bench of the Tribunal noticed the directions issued by the Bench in M.A.No. 19/Hyd/2017 in ITA No. 1686/Hyd/2012 for the assessment year 2008-09 to the learned Assessing Officer to consider only the segmental results of the AE transaction and also the internal TNMM for the purpose of benchmarking of the international transactions. The same direction is followed in the case of Palred Technologies Ltd. (supra). Same is the case in the case of Saty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be required to be analysed for the trading segment. Assessee placed reliance on the decision of a Co-ordinate Bench of the Tribunal in the case of DCIT vs. Commvault Systems (India) Private Limited, in ITA-TP No. 282/Hyd/2022. Learned DR placed reliance on the orders of the Revenue authorities. 23. We have gone through the record in the light of the submissions made on either side. The decision in the case of Commvault Systems (India) Private Limited (supra) relied upon by the assessee, the Bench followed the decision in ITA No. 2280/Hyd/2017 in assessee's own case for the assessment year 2013-14 wherein Commvault Systems (India) Private Limited (supra) was found to be a distributor. Though on principle, we agree with the findings in such decision that in the case of distributors, RPM is the MAM, but such status of the assessee in this case has to be verified. According to the Revenue authorities, assessee is involved both in purchase of goods from AEs and reselling them to the non-AEs and since the segmental information is not available, RMP cannot be accepted as MAM. 24. However, on a perusal of record, we find that the ledger copies and segmental financials at gross lev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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