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TMI Blog2024 (10) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... n prices prevailing in different markets and regions. It is on the aforesaid basis that the CIT(A) came to conclude that the TPO had clearly failed to bear in mind the factors which imbue Rule 10B(2) of the Income Tax Rules, 1962 [ Rules ]. It was also found by the CIT(A) that the net margins earned from sale of Paclitaxel and Disodium Pamidronate is higher at 14.10% as against other sales at 10.90%. Ultimately and on due consideration of the view taken by the CIT(A), ITAT came to conclude that in the absence of the appellant having produced any material which could have cast a shadow of infirmity on the findings recorded, there appeared to be no justification to interfere with the CIT(A) s order. TP adjustment which was made in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, Advs. For the Respondent : Ms. Venkita Subramonaim T.R. and Mr. Rabat Bansal, Advocates. ORDER 1. The Department questions the correctness of the judgment handed down by the Income Tax Appellate Tribunal [ ITAT ] dated 03 October 2018. Although various questions of law are proposed in the memo of appeal, Mr. Chawla, learned counsel, has in his usual fairness submitted that it is the question extracted below which alone would appear to arise for consideration:- 1. Whether the Hon'ble Income Tax Appellate Tribunal ( ITAT ) is right in upholding the order of the Hon'ble Commissioner of Income Tax (Appeals) [CIT(A)], thereby deleting the respective Transfer Pricing Adjustment(s) with regard to international transaction(s) of sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue Rule 10B(2) of the Income Tax Rules, 1962 [ Rules ]. The CIT(A) rendered the following observations while dealing with the aforenoted two products:- 14.2 The Appellant contended that the Ld TPO has not demonstrated through analysis within norms of Rule 10(B)(2) as to how the CUP method which requires high degree of comparability has been taken as MAM. The Appellant further contended that Ld. TPO has not shown that the data taken from International Business Information Services is uncontrolled transaction. Besides this, there were differences on account of following factors which TPO could not reconcile before applying CUP: - Profile of customer whether reseller, distributor or end user is not confirmed; - Pricing terms as to trade discou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its UK branch through which sale of Paclitaxel and Disodium Pamidronate happened. The net margin analysis of UK Branch is reproduced below: Particulars Basis of Allocation Total Sale of Paclitaxel Disodium Pamidronate to UK Subsidiary Other sales Export Sale Actual 68,22,14,699 1,83,31,367 66,38,83,332 Interest Received Revenue 96,257 2,586 93,671 Misc. Receipts Revenue 81,459 2,189 79,270 Exchange Gain/Loss Revenue 18,21,564 48,946 17,72,618 Total (A) 68,42,13,978 1,83,85,088 66,58,28,890 Purchases Actual 52,02,98,766 1,47,17,528 50,55,81,238 Packing, freight Forwarding Revenue 43,273 1,163 42,111 Salary Revenue 19,24,190 51,704 18,72,486 Charges General Revenue 1,34,92,684 3,62,554 1,31,30,131 Commission, Discount Rebate Actual 1,95,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... better that that of comparables. In light of the above evidences and circumstances of the case, I am of view that international transaction of sale of Paclitaxel and Disodium Pamidronate satisfy the arm's length principle and it does not warrant an addition as done by the Ld. AOITPO. Accordingly, I hold that the addition of (Rs 98,79,900 + 67,35,902) Rs 1,66,15,802 deserve to be deleted. The ground of appeal is accordingly allowed. 4. It was also found by the CIT(A) that the net margins earned from sale of Paclitaxel and Disodium Pamidronate is higher at 14.10% as against other sales at 10.90%. Ultimately and on due consideration of the view taken by the CIT(A), the ITAT came to conclude that in the absence of the appellant having produ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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