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TMI Blog2014 (12) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... orthopaedic implant and instruments to customers in India through direct sales and also through a dealer net work. The international transactions undertaken by the assessee company in Transfer Pricing documentation for the FY 2008-09 is summarised below. Table1 : International transactions undertaken by the appellant S.No. Nature of transaction Amount (INR crores) Method Applied Class - I transactions 1. Purchase of Hip, Knee, Trauma implants 35.97 Primary Method Transaction Net Margin Method (TNMM) 2. Purchase of Instruments 10.86 3. Purchase of catalogues 0.07 4. Purchase returns 0.32 Corroborative Method Resale Price Method ('RPM') Class II transactions &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted by the TOP S.No. TP Study comparables Show cause notice (Page 200 and 201 of the paper book) APPELLANT'S REPLY TO Show Cause Notice (page 133 and 134 of the paper book) Final TP order (page 77 of Appeal Memorandum) 1. Abott India Ltd. 3.1% 3.58% 3.58% 2. Aditya Medisales Ltd. 0.80% 0.29% 0.29% 3. Genetic Laboratories Ltd. - Rejected 4. Hicks Thermometers (India Ltd) 1.68% 5. Lifeline Drgus & Pharma Ltd. 0.006% 0.01% 0.01% 6. Pharma Ltd. Rejected by TPO 18.2% Rejected by TPO 7. Remi Sales & Engineering Ltd. 0.68% 0.51% 0.51% 8. Serum International Ltd. Rejected by TPO 15.46% Rejected by TPO 9. Sharon Bio-Medicine Ltd. Rejected by TPO 0.19% 0.19% 10. Solumiks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorrect and contradictory statements/ observations in the TP order, which are not relevant to the instant case, only in order to justify an otherwise inappropriate and unwarranted TP adjustment; 1.2 incorrectly holding the AMP expenses incurred by the appellant to be "excessive" on the basis of a "bright line limit" arrived at by deriving a ad-hoc set of 8 comparables from the set of 13 originally produced by the appellant in its TP documentation; 1.3 in upholding that the appellant has rendered services to its AEs by incurring the AMP expenses and by holding that a mark-up of 12.75% has to be earned by the appellant in respect of the "alleged excessive" AMP expenses, without any basis for the same whatsoever; case of a distributor nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e usage of implants and thus had no nexus with brand promotion. 1.7 ignoring that the facts and circumstances of the appellant's case during the year under consideration remain unchanged from those during the earlier years, for which the appellant's international transactions were found to be at arm's length . On the facts and in the circumstances of the case and in law, the Ld. AO erred in initiating penalty proceedings under section 271(1)(C) read with section 274 of the Act. That the above grounds of appeal are without prejudice to each other. 5. We have heard Dr.Rakesh Gupta, the Ld.Counsel for the assessee and Shri Peeyush Jain, the Ld.CIT, D.R. on behalf of the Revenue. 6. On a careful consideration of the facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 1 read with sub ground 1.3) h) Bright Line is a tool not a method (ground 1 read with sub ground 1.5). 7.1. Both the parties admit that the DRP has in a very cursory manner passed its order. While noting that the facts in this case are similar to the case of L.G.Electronics India Private Ltd. Vs. ACIT (2013) reported in 29 Taxmann.com 300 Delhi (SB), it had not applied any of the propositions laid down by the Special Bench. Many contentions raised by the assessee have not been considered. We find force in the arguments raised by the assessee. In any event as the claims of the assessee have to be examined based on the facts of the case, we deem it proper to restore the issue to the file of the TPO for fresh adjudication in accordance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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