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TMI Blog2018 (5) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing, the following effective grounds of appeal have been urged before us: - 3. Ground No.3: The Ld. AO/TPO has erred in law and on facts and in circumstances of the case in determining the Arm's Length Price of International Transactions of the appellant with its Associated Enterprises in trading segment without considering the fresh benchmarking which was specifically asked by the Ld. TPO during assessment proceedings. 4. Ground No.4: The Ld. AO/TPO/DRP have erred in law and on facts and in circumstances of the case in not considering the qualitative data of certain comparable available at the time of assessment proceedings and accordingly: a) Not considering Frontline Electro Medical Ltd in the list of comparable, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of ALP of distribution segment which consist of purchase of trading goods from AE and receipt from AE's against sale made to Indian customers pursuant to a global master agreement. The purchase of trading goods amounts to Rs. 112.32 Crores whereas receipts from AE amount to Rs. 1.16 crores. Both these transactions have been aggregated for the purpose of determination of ALP. The assessee has reflected turnover of Rs. 190.07 crores and profit margin of Rs. 8.31 Crores which translates into margin of 4.37%. The assessee adopted TNMM method to benchmark the same with profit level indicator [PLI] as operating profit / operating income [OP/OI] and the assessee being the tested party. The average PLI of nine comparables as selected by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ld. Departmental Representative [DR] supported the stand of the lower authorities. Vehement arguments have been adduced vis-à-vis turnover filter as applied by Ld. DRP and selection of comparables. Reliance has been placed on several judicial pronouncements to support the respective submissions. 4.1 We have carefully perused the rival contentions and perused relevant material on record. Upon due consideration, we find that whole controversy primarily revolves around application of Turnover Filter and functional comparability of the comparables. 4.2 During hearing before us, both the representatives heavily relied upon various judicial pronouncements to demonstrate the relevancy of turnover filter in the TP study, Ld. AR contendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue and therefore, the more onus was on assessee to justify exclusion / inclusion of two comparables namely Ashco Industries Ltd. & Frontline. The Ld. AR has brought to our notice the judicial pronouncements to contend that the comparables initially selected by the assessee could be excluded subsequently, finding them to be functionally or otherwise un-comparable in the circumstances. At the same time, we are of the opinion that there could not be any cherry picking to suit the requirement of the assessee. 4.4 Therefore, keeping in view the overall factual matrix of the case, we are left with no option, but to remit the matter back to the file of Ld. AO / TPO for fresh determination of ALP of the transactions under dispute keeping ..... X X X X Extracts X X X X X X X X Extracts X X X X
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