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2011 (12) TMI 233 - AT - Income TaxTransfer Pricing - adjustment in ALP – addition made on account of royalty - royalty paid @ 3% on export and domestic sales (net of imported raw-material & bought out components) to AE – Revenue contending assessee to be contract manufacturer on the ground that goods were specific goods, produced for the associate enterprises using the technology received from AE - A.Y. 04-05 - Held that:- Royalty fee is being paid by the appellant under the Technology agreement to the A.E, no distinction is made between the products sold to the A.E or sold to the independent parties.Further, Assessee has placed on record various evidences to prove that royalty payment at 8% on export and 5% on domestic sales has been referred as a reasonable payment. However, TPO failed to bring any material on the record which can suggests that payment of royalty @ 3% was excessive, and not at arm's length price. Moreover, no material was brought on record to show that sales price charges was not at arm's length. TPO further not brought any material indicating the fact that assessee is a contract manufacturer. He only draws inference in this regard. Thus, after taking into consideration the facts and circumstances and the findings of the CIT (Appeals), we do not find any merit in this appeal – Decided against the Revenue.
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