2012 (11) TMI 312

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....nt of adjustments made by the Transfer Pricing Officer on an Arms Length basis as contemplated under the Transfer Pricing evaluations, without appreciating the facts of the case. (2)  The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the ITO/AC/DCIT be restored." 2. The facts relevant for adjudication of the issue involved are that the assessee is engaged in the business of manufacturing of basic liquid resins, solid resins and formulations thereof. The products are sold under the brand name of "Araldite". The assessee had exported finished goods to the associated enterprises (AEs) and has also imported raw materials from its AEs. It has also paid management fees for services received from ....

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....e to sales all the comparable parties were worked out in the following manner :- Sl. Name  EBIT % to Sales 1 Hawcoplast Chemicals Ltd. (-)8.00 2 Pragati Chemicals 2.78 3 Resins & Plastics Ltd. 4.71 4 Sreechem Resins Ltd. 1.91   Thus, average profit margin worked out at 0.35% vis-à-vis 1.01 of the assessee company. 4.1 The TPO rejected the assessee's exclusion of depreciation allowance and also rejected the comparability analysis of Hawcoplast Chemicals Ltd. as a comparable entity. As per the TPO, the average mean of EBIT of the three accepted comparables arrived at 3.13% as compared to assessee's EBIT at 1.01%. Accordingly computation of arms length price was determined by him as under :- [in Cror....

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....age is applied then also it comes within the +/- range of 5%. This contention was also appreciated by the Ld. CIT(A) and accordingly he deleted the adjustment made by the TPO and the Assessing Officer, after discussing the issue at length in para 6.4 to 6.7 of the appellate order. 6. At the time of hearing, both the parties made their exhaustive submissions on the issues involved. However, they fairly conceded that even if other aspect and finding of the CIT(A) is not taken into consideration then also, the arm's length price determined by the TPO comes within +/- range of 5%. 7. After carefully considering the submissions and also the findings of the CIT(A) as well as the TPO, we do not find necessary to discuss the various issues as....