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2016 (4) TMI 803 - ITAT DELHI

2016 (4) TMI 803 - ITAT DELHI - TMI - MAM for determining ALP in respect of the trading section - Held that:- It is observed that the primary objective of the assessee is of manufacturing/trading/assembling of Telecom Power Equipment, visual display products, industrial automation and magnetic components, etc. The assessee had used TNMM as MAM for arriving at the ALP in respect of purchase of raw materials, export of finished goods and in respect of Transaction relating to import of industrial a .....

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ppropriate method for calculating the ALP in respect of trading segment.

We do not find any infirmity in the findings of the ld.CIT(A). As in the subsequent year the TPO himself has accepted RPM to the MAM for determining the ALP for the trading segment, on the similar facts and circumstances, as recorded by the ld.CIT(A). We therefore uphold the findings of ld.CIT(A) - Decided against revenue. - I.T.A .No.-3004/Del/2013 - Dated:- 14-3-2016 - SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SMT .....

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reciating the fact that each year is an independent year and principle of res-judicata are not applicable to income tax proceedings. In view of the fact and circumstances of the tax payer s case, TNMM is the most appropriate method. 2. That the order of the ld. CIT(A)-II, Dehradun is against the spirit of legislature and the order of the Assessing Officer is liable to be resotred. 3. That the appellant craves, leave to add, alter, amend or vary from the above grounds of appeal. 2. Brief facts of .....

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as per the CA s report u/s 92E of the I.T. Act, the assessee entered into international transaction with its AE to the extent of ₹ 23,72,68,470/-which is as under; S.No. Type of International Transaction Total Value (Rs.) Method selected 1. Purchase of raw materials 11,38,15,778/- TNMM using operating profit as a PLI operation revenue. 2. Export of finished goods 20,68,837/- TNMM using operating profit as PLI operating revenut. 3. Import of industrial automation products 118,615,849/- RPM .....

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products and sales commission segment, the assessee used Resale Price Method(RPM) as the MAM and gross profit as PLI sales. 2.2. The ld.AO therefore made a reference u/s 92CA of the I.T. Act was made to Addl. Director Income Tax, Transfer Pricing Officer, Kanpur (Camp Office Noida) to compute Arm s Length Price(ALP), regarding the international transactions made by the assessee company. The TPO, Noida determined the arm s length price of the international transaction of the assessee relating to .....

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above order u/s 143(3) of the IT Act, 1961, the assessee filed an appeal before the ld. CIT(A)-II, Dehradun. 3.1. The ld.CIT(A) called for a report in respect of some documents filed by the aassessee in respect of net margins in subsequent years. The TPO filed his report on 08.02.2013, in which he once again he supported that TNMM must be applied to calculate the ALP. The assessee also filed its objection to the report. The ld. CIT(A)-II, Dehradun has allowed the appeal in favour of the assesse .....

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4. Aggrieved by the order of the ld.CIT(A), the Revenue is in appeal before us now. 4.1. The ld.DR submitted that the ld.TPO has correctly applied the TNMM as the MAM for determining ALP. He supported the order of the ld.TPO. 5. On the contrary, the ld.AR submitted that RPM must be MAM for these transactions as there is no value addition that is made by the assessee. He reiterated his submissions made before the ld.CIT(A) that, RPM is applied where an enterprise purchases from its AE and then re .....

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