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TMI Blog2017 (8) TMI 1417X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of adjustment of the Arm's Length Price of the international transaction on payment of royalty by assessee to its Associated Enterprise, from the income of the assessee u/s 92C? ii) Whether the Tribunal/CIT(A) was legally justified in deleting the addition of Rs. 2,07,49,000/- by holding that the Comparable Uncontrolled Price method (CUP) was not applicable?" 3. However, now issue is covered by the decision of this Court in the case of same assessee in D.B. Income Tax Appeal No. 71/2015 decided on 26th July, 2017 wherein it has been held as under:- "4. The issue is now covered by the decision of this court in Income Tax Appeal No.72/2015 (CIT Alwar Vs. M/S Sakata Inx (India) Ltd. decided on 18.05.2017, where while decidin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es available with the assessee, this company had 14.26% related party transactions as a percentage of sales (Total 99.75 crore related party transaction as against sales of Rs. 699.38 crore). India assessee has quoted the ITAT (Delhi) decision in the case of Sony India (Pvt.) Ltd. which has observed...." An entity can be taken as uncontrolled if its related party transactions do not exceed 10 to 15% of total revenue..." It was claimed by the assessee that the comparable company's related party transaction did not exceed 15% of sales, the same cannot be rejected on account of related party transactions. However, the observation regarding 10-15% related party transaction squarely covers the case of the company which, according to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia. However, it is seen that the other companies which have been taken as comparables deal in dyes and pigments. As far as product similarity is concerned toners for laser printers, digital printers and photocopiers would be nearer to the products of the assessee. Further, this company as well as the assessee both are under the same NIC Code 24222. Hence, assessee's objection is not considered valid, and this company needs to be included as a comparable.(2) M/s Rainbow Ink & Varnish Manufacturing Co. Ltd: It was accepted by the assessee that this company is engaged in manufacture of printing ink. Hence, this is also considered as a comparable. Companies identified for Distribution function: Out of the 5 comparables identified for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs. 7,83,58,988/- declared in Form 3CEB, after making adjustment of Rs. 1,45,52,537/-/. The Assessing Officer shall add this amount (Rs.1,45,52,537/-) to the income of the assessee." 6. She further contended that tribunal has committed an error in holding against the department. 7. Counsel for the respondent Mr. Jhanwar has relied upon the decision of Bombay High Court in Commissioner of Income Tax vs. General Atlantic (P) Ltd. (2016) 384 ITR 271 (Bom) wherein it has been held as under:- "On the aforesaid analysis, the Tribunal found that it had in the case of Carlyle India Advisors (P.) Ltd. (supra) on detailed examination found only one of the eight comparables selected by the Revenue i.e. IDC (India) Ltd. applicable to arrive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t- Assessee was providing services of Broking Services, Business Support Services and Investment advisory services to its customers. The TPO had adopted a list of comparable companies which were primarily engaged in providing services as merchant banker as comparable to determine the ALP in respect of the Investment Advisory Services rendered by it to its AEs. The companies selected by the TPO were identical to one selected in Carlyle India Advisors (P) Ltd., The aforesaid decision of the TPO in Carlyle (I) Advisors (P.) Ltd. v. Asstt. CIT [2012] 24 taxmann.com 176 (Mum.) was a subject matter of consideration by the Tribunal in ITA No. 7901/Mum/2011. The Tribunal after examining the business of each of the individual comparable concluded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) to determine the ALP in the case of Assessee therein i.e. General Atlantic (P.) Ltd. {supra). The Tribunal allowed the appeal in General Atlantic (P.) Ltd. {supra) by following its decision in Carlyle India Advisory (P.) Ltd. (supra) just as the Tribunal has done in the Respondent's appeal by the impugned order; and
(d) Accordingly, question (c) does not give rise to any substantial question of law. Thus not entertained.
8. The issues are answered in favour of the assessee and against the Department."
5. In view of the above, both the issues are answered in favour of assessee against the department.
4. In that view of the matter, no substantial question of law arises.
5. Hence, the appeal stands dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
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