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TMI Blog2019 (1) TMI 2063X X X X Extracts X X X X X X X X Extracts X X X X ..... be limited to the international transactions with the AEs only and not to the entity / segmental level transactions. This proposition if not accepted would also result in absurdity wherein the total value of international transactions would be much less than the adjustment made to ALP.
As relying on Tara Jewels Exports Private Limited [2015 (12) TMI 1130 - BOMBAY HIGH COURT] we direct the TPO to recomputed the ALP of the international transactions of the assessee by considering only the transactions with AE.
Non-grant of credit for tax deducted at source - As this matter is a subject matter of verification by the ld AO, we direct the ld AO to verify this factual aspect and grant TDS credit accordingly. X X X X Extracts X X X X X X X X Extracts X X X X ..... . 9. On the facts and in the circumstances of the case and in law, the Hon'ble DRP erred in disregarding the binding precedent laid down by the Hon'ble Bombay High Court without assigning any reasons for the same. 3. The brief facts of this issue are that Damco is one of the world's leading third party logistics providers which is engaged in the business of providing logistics solutions, encompassing supply chain management, freight forwarding, warehousing and distribution services to global customers of Maersk Group. Freight forwarding services ensure that cargo will arrive at the proper destination by an agreed upon date, in good condition using transport of various sorts from air freight and trucking companies to rail freight and oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of cargo from Indian port to Indian consignee. During the course of performing the above activities, the assessee pays / receives freight, terminal handling and other charges to / from Associated Enterprises (`AEs'). Depending on the International commercial terms (Inco terms) agreed between the consignor and consignee of each transaction, the origination and destination services performed by the assessee could be billed to an Indian consignor / consignee or billed to Damco overseas affiliates. 4. The international transactions as mentioned in Form 3CEB of the assessee for the year under consideration and in the immediately preceding assessment year are as under:- Sr. No. Nature of International Transaction Value of transaction (Rs.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Integrated Logistics Limited 2.30 5. Transport Corporation of India Limited 4.04 Average 3.38 Assessee's margin 1.41 6. The ld TPO determined the ALP of the transactions as under:- Particulars Amount in rupees Adjustment on an entity level basis Operating Revenue of the assessee A 998,19,61,648 NPM of comparables B 3.38% Assessee's NPM margin C 1.41% ALP Profit D=A*B 33,73,90,303 ALP Total Cost E= A-D 964,45,71,344 Actual Total cost of the assessee F 984,10,52,690 Difference in Actual cost and ALP cost G = F - E 19,64,81,346 +/- 3 percent computation Total transactions with AEs (expenses) H 426,84,81,231 3% of the Interna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival submissions. The main contention of the ld AR is that the adjustment to ALP should be computed only by taking the international transactions carried out with the AE and not at entity level which admittedly includes non AE transactions also. We hold that the objective of computing the ALP is to determine the income arising from an international transaction and accordingly, the adjustment that is required to be made is to be limited to the international transactions with the AEs only and not to the entity / segmental level transactions. This proposition if not accepted would also result in absurdity wherein the total value of international transactions would be much less than the adjustment made to ALP. We find that the issue under con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the provisions of Chapter-X of the Act that the adjustment which has to be done to arrive at ALP is only in respect of the transaction with it's AEs. Thus no fault can be found with the order of the Tribunal. 7. Mr.Pinto is unable to point out how the aforesaid finding of the Tribunal is incorrect in law in the face of the clear provisions in Chapter X of the Act. The question as framed by the revenue to our mind do not arise from the impugned order of the Tribunal as the issue raised in the proposed question is not disputed. Accordingly, we see no reason to entertain the proposed reframed question of law as it does not give rise to any substantial question of law. 8. Accordingly, the appeal is dismissed. No order as to costs." 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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