TMI Blog2023 (1) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... th price determined by the assessee should have been accepted. TPO is also suggesting the same in his remand report. According to that the adjustment at the best could have been restricted - dispute resolution panel did not give any of his finding about the correct approach. Therefore, the learned AO repeated the same addition as it was suggested by the learned transfer-pricing officer. We find that when the approach adopted by the assessee is found to be acceptable, the adjustment determined by the learned transfer-pricing officer in the remand report deserves to be accepted. Accordingly we direct the learned AO to restrict the addition on account of arm s-length price of the international transaction of receipt of royalty income from V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a royalty income of ₹ 46,695,981/- from its associated enterprises from Vietnam. Assessee has benchmarked this international transaction applying transactional net margin method as the most appropriate method. The learned transfer pricing officer found it untenable and noted that assessee has not given any benchmarking of the transaction of the royalty income. The notices were issued to the assessee went unnoticed and unresponded. Therefore the learned transfer pricing officer benchmarked this transaction adopting Transactional Net Margin Method by comparing the assessee s margin of operating profit against operating cost with three years weighted average of comparables in the textile manufacturing industry, selecting 5 comparable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so submitted a transfer pricing study report where the transaction has been benchmarked adopting the transactional net margin method as the most appropriate method but taking the associated enterprise as tested party. According to Vietnam transfer pricing rules, Assessee selected the comparable profit method, which was found to be equivalent to Transactional Net Margin Method in India. Thereafter it was examined by the learned transfer-pricing officer and he found that the adjustment accepting the above contention of the assessee could be of ₹ 4,470,673/ only. Assessee also submitted written submission before the learned dispute resolution panel on remand report. The learned dispute resolution panel disposed of the objection of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t margin method as the most appropriate method for benchmarking of this transaction taking its associated enterprise in Vietnam as tested party. When this benchmarking methodology submitted before the learned transfer pricing officer, assessee could not remain present before him, could not submit the details, therefore, it was rejected. The ld TPO accepted the transactional net margin method as the most appropriate method, but took assessee as tested party and after selecting five comparables computed the adjustment on account of A-L P of ₹ 21,900,415/ . On objection before the learned dispute resolution panel, the remand report of the learned transfer-pricing officer was obtained. The assessee submitted the transfer pricing study rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings, which assessee could not submit in the TP assessment, if no defect is pointed out by the learned transfer-pricing officer, the arm s-length price determined by the assessee should have been accepted. The learned transfer-pricing officer is also suggesting the same in his remand report. According to that the adjustment at the best could have been restricted to ₹ 4,470,673/ . The learned dispute resolution panel did not give any of his finding about the correct approach. Therefore, the learned AO repeated the same addition as it was suggested by the learned transfer-pricing officer. We find that when the approach adopted by the assessee is found to be acceptable, the adjustment determined by the learned transfer-pricing office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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