ITAT Favors Resale Price Method for Solar Goods Transfer Pricing, Overturning TPO's Net Margin Approach in Key Appeal Win.

The ITAT considered TP Adjustment in the context of international transactions involving purchase of solar goods/lights and reimbursement of expenses and warranty costs. The TPO rejected RPM and applied TNMM as the most appropriate method. The ITAT noted that the reimbursement expenses and warranty claims were a small fraction of the total transaction value, indicating RPM as suitable. Citing precedent, the ITAT emphasized that where no value addition occurs before resale, RPM is appropriate. As the assessee was a mere reseller without value addition, RPM was upheld as the correct method. The ITAT concluded that even when combining reimbursement transactions with purchase transactions, RPM remained valid due to the significant difference in values. Consequently, the assessee succeeded on multiple appeal grounds. .....

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