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2011 (11) TMI 194 - AT - Income TaxTransfer Pricing – Determination of Arm Length price - Transaction by transaction analysis vs Transactional Net Margin Method ("TNMM") on a company wide basis – assessee engaged in manufacture & sale of readymade garments – Also engaged in providing buying services to the associated enterprise - Held that:- Assessee's different segmental activities viz. manufacturing export activities, buying/sourcing and commission earning activities are independent of each other. Each activity has different factors in respect of source, identification of vendors, merchandise, designs quality control, handling etc. The FAR analysis in each of the activity will have distinct and separate considerations. They are required to be analyzed on transaction to transaction basis and not by combining all activities. Hence, TPO did not appreciate the assessee's transactions correctly and applied entity level benchmarking on TNMM method by combining assessee's all international transactions with associated enterprise without justification. - Decided in favor of assessee.
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