TMI Blog2024 (3) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... T also held that the Transactional Net Margin Method [ TNMM ] ought to be adopted as the most appropriate method for benchmarking the respondent s case. HELD THAT:- During the course of hearing today, it was brought to our attention that the matter has been resolved inter partes in terms of the assessment which came to be finalised for AY 2014-15 and that Modicare Limited has been excluded from the list of comparables to determine the ALP and the upward adjustments of income as proposed by the Department has not been undertaken as well. We are informed that the view taken therein has been duly accepted and followed in the subsequent years. Thus bearing in mind the principle of consistency, we find no justification to entertain the instant a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional transactions with its associated enterprises [ AEs ]. The said transactions for the assessment years [ AYs ] 2009-10, 2010-11, 2011-12 and 2012-13 were referred to the TPO under Section 92CA of the Act for determination of the arm s length price [ ALP ]. 3. The TPO vide its orders dated 30 January 2013 [AY 2009-10], 24 January 2014 [AY 2010-11], 08 January 2015 [AY 2011-12] and 19 January 2016 [AY 2012-13] rejected the comparable entities as selected by the respondent and selected Modicare as the comparable entity after considering databases, annual reports and other relevant material and proposed an upward adjustment of the income of the respondent. Consequently, assessment orders were passed by the Department for the said AYs reflec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r hand. The assessee had stressed that if appropriate marketing was made from the data available, the differential marketing strategy per se would not pose a difficulty with respect to the transfer pricing adjustment. The Court finds some merits in the arguments, especially since what the Revenue Authorities would be left with if the ITAT s order was not to be disturbed, would be what a comparable in the form of Modicare Ltd (supra). 9. In view of the above reasons, this Court is of the opinion that the appeal should be re-examined by the ITAT; it should be addressed on these two aspects i.e. firstly, the appropriateness of including Modicare Ltd. having regard to the availability of data with respect to the different product segments, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to consultants/agents and the substantial difference between the entities in the advertising, marketing and promotion expenses incurred by them. It ultimately held that Modicare cannot be considered as a comparable entity under the RPM method. The ITAT also held that the Transactional Net Margin Method [ TNMM ] ought to be adopted as the most appropriate method for benchmarking the respondent s case. It is against these findings of the ITAT that the Department has filed the instant appeals before us. 7. However, during the course of hearing today, it was brought to our attention that the matter has been resolved inter partes in terms of the assessment which came to be finalised for AY 2014-15 and that Modicare Limited has been exclud ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
