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TMI Blog2015 (5) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as comparables for the purpose of determining the arms length price (ALP) in respect of the international transaction entered into by the respondent in respect of the assessment year 2005-06. 2. The appellant contends that the following substantial question of law arises in this appeal: "Whether in the facts and circumstances both on facts and in law of the case the learned ITAT has erred in directing AO/TPO to include M/s Torrent Gujarat Biotech Limited and M/s Standard Pharmaceuticals Limited as comparables considering the fact that they were using only a very small percentage of Penicillin-G as raw material as compared to taxpayer and could not have been used as a fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to the other ingredients was only 5.23% i.e. less than the proportionate usage of PEN-G by Torrent Gujarat Biotech Limited which was 7.60%. (C) Prior to finalizing the comparable concerns, the TPO had, for the assessment year 2005-06, applied the following filters/criteria: "Only companies using Penicillin-G as raw material were selected. Companies having no data for the financial 2004- 05 were rejected. Companies predominantly engaged in trading activity were rejected. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Limited, Aurobindo Pharma Limited, Nectar Life Sciences Limited and Standard Pharmaceuticals Limited. The Tribunal accepted the respondent's contention that where the facts are identical from year to year similar filters should be adopted for benchmarking international transactions. The Tribunal accepted the respondent's contention that Torrent Gujarat Biotech Limited ought not to be rejected on the ground that it's use of PEN-G was only 7.60% of its total sale. The tribunal based its decision on two relevant and important factors. Firstly, the aforesaid filter applied by the TPO of selecting only companies using PEN-G as raw material did not specify the extent of use of PEN-G as compared to the total sales of the company. Indeed, the TP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vely negligible use of PEN-G as compared to its total use of raw material or sales. We noted earlier that the TPO had himself considered Standard Pharmaceuticals Limited to be a comparable. The so called concession of the department was not binding either on the respondent or on the Tribunal. The Tribunal was called upon to determine whether or not Torrent Gujarat Biotech Limited was an appropriate comparable. The Tribunal's conclusion was not based merely upon the department having initially considered Standard Pharmaceuticals Limited to be a comparable. It came to the conclusion also on the ground that the filters adopted by the TPO did not stipulate the percentage of use of PEN-G by a company of its total sales or use of raw material. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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