TMI Blog2018 (1) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... -06. In this particular year also, the working capital adjustment was not considered by TPO, therefore, ITAT directed the TPO to do the needful by taking into account of the relevant factors which was ignored on the earlier occasions. However, it would have to be decided fresh only after the fresh comparables are chosen by the TPO which are similar to the function segment and ownership of the assets. - ITA No. 2936/DEL/2014 And ITA No. 3005/DEL/2014 - - - Dated:- 8-1-2018 - SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER For The Appellant : Sh. Yogesh Verma, CIT DR For The Respondent : Sh. Manoneet Dalal, AR, Sh. S. P. Singh, AR ORDER PER SUCHITRA KAMBLE These cross appeals are fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 10D of the Income Tax Rules, 1962 ( Rules ) and selected uncontrolled comparable companies based on a detailed Functional, Asset and Risk ( FAR ) analysis, following a methodical and consistent benchmarking process in respect of contract research and development services. 2.2. rejecting the arm s length margin computed by the Appellant for contract R D service segment using multiple year / average data and instead of using current year data for comparable companies, i.e., data for FY 2006-07, despite the fact that the same was not available with the Appellant at the time of preparing its transfer pricing documentation. 2.3. ignoring the comparability analysis undertaken by the Appellant for its contract research and developm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of capital goods TNMM 32,54,246/- 3 Contract research and development TNMM 9,18,66,974/- 4 Administration fee paid TNMM 42,07,000/- 5 Reimbursement towards IT Charges TNMM 72,52,782/- 6 Reimbursement of expenses received CUP 7,36,462/- 7 Reimbursement of expenses paid CUP 2,36,774/- In the TP study, the international transactions in Distribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62 and selected uncontrolled comparable companies based on detailed functional, asset and risk (FAR) analysis, following a methodical and consistent bench mark process in respect of contract research and development services. 9. The Ld. DR submitted that as related to Choksi Laboratories the Transfer Pricing Officer rightly included this comparable. 10. The Ld. AR submitted that the TPO has not at all discussed how Chocsi Laboratories will be a comparable. In-fact for Assessment Year 2005-06, the CIT(A) has excluded the same by saying that company does not have segmental information and it is engaged in diverse activities. Therefore, functionally dissimilar. The CIT(A) also in the present Assessment Year has taken cognizance of the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal refinishes market. R D activity is targeted towards development of unfortunately friendly and technology advances products and development of new colour Akzo India does not own any significant intangible and does not take any significant research and development on its account that leads to the development and non written intangible. Akzo India uses the trade marks, process and know-how technological data software, operating/quality standard etc developed, owned by Akzo Group. Akzo India Provides contract R D services only to the Akzo Group and is compensating on the cost plus pre-determine basis and thus operating in an owner risk insulated atmosphere. As a cost plus method is considered as compensation as the risk insulated servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee after due verification and application selected uncontrolled comparable companies based on a detailed functional asset and risk (far analysis). The Ld. AR further submitted that using multiple year/average data instead of using current year data for comparable companies which was not available to the assessee,is not proper on part of TPO/A.O as well as CIT(A). Working capital levels were significantly different from the comparables which were not taken into account by the TPO as well as CIT(A). The Ld. AR relied upon the order of the ITAT in the assessee s own case where in Para 29 detail discussion was given. 17. The Ld. DR relied upon the order of the TPO and the CIT(A). 18. We have heard both the parties and perused the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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