A brief head note is given for each case. Nike India and its AE in respect of contract with BCCI for promotion and brand building of Nike was an international transaction. 92B as the section postulates at least one non-resident. The assessee provided two types of broking services to related as well as unrelated parties viz. Since an internal CUP was available, the TPO rejected TNMM and applied CUP.
TP-ITA No 1599 of 2014 dated 07. TP-adjustments in respect of export of manufactured steel items to its AE and receipt of commission from AE. Tribunal remitted the issue to the file of AO for fresh adjudication. The Tribunal held that where the assessee was engaged in purchase of finished goods from its AE without any value additions, the most appropriate method for benchmarking the international transactions was the Resale price method. It held that the TPOs reasoning to adopt TNMM i. TNMM which provides for broad comparability as opposed to higher degree of similarity under the other methods was invalid. ACIT vs Akzo Nobel Car Refinishes India Pvt.
Where assessee bought products from AE and resold them without further processing, the Tribunal, relying on the decision in the case of Tektronix India P Ltd , held that RPM was the most appropriate method. It also relied on the case of Frigoglass India Pvt. Ltd which upheld Resale Price Method as the most appropriate method in case of a distributor. This view was further fortified by OSI Systems Pvt.
The Tribunal deleted TP adjustment of Rs. II transactions in respect of import of finished goods in trading segment. India and benchmarked the international transaction adopting TNMM as MAM, which was rejected by TPO and recharacterized the service and commission activities of the assessee as trading segment. CIT vs Mitsui and India Pvt Ltd-TS-602-SC-2017-TP-ITA No. The Tribunal observing that the international transaction of imports from AE had a direct bearing on the export of goods to AE as the price of exports to AE was impacted by import price, held that when the transactions were multiple and inter-related then if a particular transaction out of the composite transactions could not be tested under CUP then it was not proper to apply separate methods for determining the ALP for each of the transaction. The Tribunal, allowed Revenue’s appeal and held that the assessee was not justified in benchmarking the purchase price of raw materials acquired from its AE under CUP by comparing the price charged by the AE to independent third parties in Europe as the market conditions of Europe and India were not similar and had different regulatory norms for pollution caused by automobiles. The Tribunal, noting assessee’s submission that once TNMM at entity level was applied and accepted by TPO and the items of expenditure formed part of the operating expenditure, no separate adjustment on account of specific items of expense was required, remitted the TP-adjustment in respect of selling commission and network charges paid by assessee to its AE to the file of AO directing it to delete the TP adjustment on account of these two items if it formed part of operating expenditure.
DRP accepting assessee’s adoption of TNMM over TPO’s adoption of PSM as the most appropriate method and accordingly dismissed Revenue’s appeal. Toubro Infotech Ltd, Mindtree Ltd, Persistent Systems Ltd, Spry Resources having turnover Rs. 37074498 crores respectively as they failed the turnover filter of 10 times the assessee’s turnover of Rs. Further, it remitted the comparability of Genesys International Corpn. Ltd to the file of the DRP in the absence of availability of annual report or a ruling pertaining to the relevant AY. Further, Megasoft was engaged in the business of which was functionally dissimilar to the assessee. Infosys Ltd, Mindtree Consulting Ltd, Persistent Systems Ltd, Sasken Communication Ltd, Tata Elxsi ltd and Flextronics Software Ltd having turnover of Rs, 527.
12 crores respectively as it failed the turnover filter of 10 times the assessee’s turnover of Rs. Lucid Software Ltd having turnover of Rs. 10th of assessee’s turnover of Rs. KALS Info Systems Ltd as it was engaged in the business of sale of products and training which was functionally dissimilar to the assessee.