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2020 (9) TMI 1159 - AT - Income TaxTransfer pricing adjustment made in respect of distribution segment - assessee adopted “Resale Price Method” (RPM) as most appropriate method for the distribution segment - HELD THAT:- We notice that the co-ordinate bench has examined the issue of “most appropriate method” for a distributor of products in the case of Acer India Pvt Ltd [2020 (3) TMI 426 - ITAT BANGALORE] In the instant case, the assessee has claimed that it has not carried out any value addition to the products imported by it from its Associated Enterprises. Also submitted that the functions to be performed by the assessee as a “distributor”, which is highlighted by the TPO is normal functions performed in the trade circles even by a non-related party - revenue has not negated both these submissions of the assessee. The TPO has also rejected the RPM for the reason that the assessee is incurring Net loss. As held by the Tribunal in various cases that the Gross Profit margin has to be compared under RPM. Accordingly, we are of the view that RPM is the most appropriate method in the facts and circumstances of the case. Accordingly, we direct the AO/TPO to adopt Resale Price Method as most appropriate method and determine the ALP of the transactions accordingly Transfer pricing adjustment made under ITES segment - assessee adopted TNM method as most appropriate method and Operating Profit/Operating Cost (OP/OC) as Profit Level Indicator (PLI) - Comparable selection - HELD THAT:- Having regard to the submission of the assessee that the segmental results is required to be compared with the assessee company, we are of the view that this issue also requires fresh examination at the end of the AO/TPO. Accordingly we restore this company also to their file for examining it afresh.
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