Sanyo India Pvt. Ltd., V. D.C.I.T.,

ITA 224/BANG/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8692 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER IT(TP)A NO.224/BANG/2014 ASSESSMENT YEAR : 2009-10 M/S. SANYO INDIA PVT. LTD., NO.45, II FLOOR, JUBILEE BUILDING, MUSEUM ROAD, BANGALORE 560 025. PAN: AAJCS 0730M VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI CHAVALI NARAYAN, C.A. RESPONDENT BY : SHRI FARAHAT HUSSAIN QURESHI, CIT-II(DR) DATE OF HEARING : 16.03.2015 DATE OF PRONOUNCEMENT : 27.03.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 31.1.2014 OF THE DY. CIT, CIRCLE 12(3), BANGALORE PASSED U/S. 14 3(3) R.W.S. 144C(13) OF THE INCOME-TAX ACT, 1961 [THE ACT]. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL BY THE ASSESSEE IS AS TO WHETHER THE DISPUTE RESOLUTION PA NEL (DRP) WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE TRANSFER P RICING OFFICER( TPO) SUGGESTING AN ADJUSTMENT OF RS.13,33,55,226 TO THE ARMS LENGTH PRICE IT(TP)A NO.224/BANG/2014 PAGE 2 OF 11 (ALP) OF AN INTERNATIONAL TRANSACTION ENTERED INTO BY THE ASSESSEE WITH ITS ASSOCIATED ENTERPRISE (AE) U/S.92 OF THE INCOME TAX ACT, 1961 (ACT). THE ASSESSEE IS A PRIVATE LIMITED COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 ON 26.5.2005. IT IS A WHOLLY OWNED SUBSI DIARY OF M/S SANYO INDIA PVT. LTD., JAPAN, PRIMARILY ENGAGED IN THE BUSINESS OF DISTRIBUTION AND SALE OF CONSUMER DURABLES IN THE NATURE OF WASHING MACHI NES, MICROWAVE OVENS, PROJECTORS, REFRIGERATORS, AUDIO AND DIGITAL PRODUCTS, AIR CONDITIONERS, SPARES ETC. SUCH GOODS WHICH WERE SOLD BY THE ASSES SEE WERE IMPORTED FROM ITS ASSOCIATED ENTERPRISE ABROAD NAMELY M/S SA NYO ELECTRIC COMPANY LTD., JAPAN. THOUGH, THERE WERE ALTOGETHER FIVE CLA SSES OF INTERNATIONAL TRANSACTIONS FOR THE ASSESSEE, THE AO AS WAS WELL A S THE TPO HAD ACCEPTED ASSESSEES PRICES TO BE IN ARMS LENGTH VI S--VIS ALL OF THEM, EXCEPT FOR THE TRANSACTIONS RELATING TO IMPORT OF C ONSUMER DURABLES FOR RE- SALE. ASSESSEE HAD ADOPTED RESALE PRICE METHOD (RP M) USING GROSS PROFIT MARGIN ON SALES AS PROFIT LEVEL INDICATOR (P LI). AS PER THE ASSESSEE RE-SALE PRICE METHOD WAS MOST APPROPRIATE METHOD FO R EVALUATING THE VALUE OF IMPORTS. ASSESSEE RELIED ON RULE 10B(1)(B)OF TH E IT RULES. AS PER THE ASSESSEE RPM WAS APPLICABLE IN A SITUATION WHERE PR OPERTY OR SERVICES WERE PURCHASED FROM AN ASSOCIATED ENTERPRISE WERE R E-SOLD AS SUCH TO AN UNRELATED ENTERPRISE. ASSESSEE AFTER A SEARCH OF V ARIOUS COMPARABLE CANDIDATES ZEROED IN ON SIX COMPANIES AS PROPER COM PARABLES. THE RESULT OF THREE YEARS OF THESE COMPANIES VIZ., FOR YEARS E NDED, 30-03-2007, 31- 03-2008 AND 31-08-2009 WERE CONSIDERED AND WEIGHTED AVERAGE MARGIN OF IT(TP)A NO.224/BANG/2014 PAGE 3 OF 11 SUCH COMPARABLES WERE WORKED OUT AT 9.44%. SINCE THE ASSESSEE HAD MARGIN ON SALE OF 10.84%, AS PER THE ASSESSEE IT WA S WELL WITHIN PLUS OR MINUS 5 % OF THE ARMS LENGTH MARGIN OF 9.44%. TH US, AS PER THE ASSESSEE THERE WAS NO REQUIREMENT OF ANY ADJUSTMENT FOR PRICING OF IMPORTED GOODS. 3. THE TPO WHEN THE MATTER REGARDING FIXATION OF A LP OF INTERNATIONAL TRANSACTIONS WERE REFERRED TO HIM, PROPOSED TO REJE CT THE RPM ADOPTED BY THE ASSESSEE. AS PER THE TPO, THE TRANSACTION NET M ARGIN (TNM) METHOD WAS MOST APPROPRIATE SINCE IT OPERATED IN A MANNER SIMILAR TO COST PLUS AS WELL AS RE-SALE METHODS. FURTHER, AS PER THE TPO WHEN THE TNM METHOD WAS APPLIED THE NET MARGINS WERE LESS AFFECTED BY T RANSACTIONAL DIFFERENCES, THAN THE RPM METHOD. AS PER THE TPO WH EN NET MARGIN OF TAX PAYERS FROM CONTROLLED TRANSACTIONS COULD NOT BE ES TABLISHED WITH REFERENCE TO THE NET MARGIN OF THE SAME TAX PAYER WITH REFERE NCE TO COMPARABLE UNCONTROLLED TRANSACTIONS, RE-SALE OF PRICE AND COS T PLUS METHOD COULD NOT BE APPLIED. 4. THE ASSESSEE INSISTED THAT RPM METHOD WAS THE D IRECT AND MOST APPROPRIATE ONE IN ITS CASE. ASSESSEE ALSO RELIED ON OECD GUIDELINES, IN SUPPORT OF ITS CONTENTION THAT RPM METHOD WAS BEST SUITED TO IT. 5. HOWEVER, TPO WAS NOT IMPRESSED BY THE ABOVE. ACCORDING TO HIM, PURCHASES FROM ASSOCIATED ENTERPRISES WERE MORE THA N 60% OF THE TOTAL PURCHASES. FURTHER, AS PER THE TPO, ASSESSEE HAD TA KEN MULTIPLE YEARS IT(TP)A NO.224/BANG/2014 PAGE 4 OF 11 DATA OF COMPARABLES WHILE DOING THE TP ANALYSIS. ASSESSEE ALSO COULD NOT ESTABLISH FUNCTIONAL SIMILARITY OF THE PRODUCTS SOL D BY IT AND THE PRODUCTS SOLD BY COMPARABLES SELECTED BY IT. THEREFORE, HE REJECTED THE RE-SALE PRICE METHOD ADOPTED BY THE ASSESSEE AND SUBSTITUTE D WITH TNM METHOD. THE TPO CHOSE 7 COMPARABLE COMPANIES AND ARRIVED AT THE ARITHMETIC MEAN OF PROFIT MARGIN OF OPERATING PROFIT TO SALES OF 3.35% OF THE COMPARABLE COMPANIES AND WORKED OUT AN ADJUSTMENT T O THE ALP OF RS.21,80,58,290. 6. ASSESSEE OBJECTED TO THE ABOVE TREATMENT BEFORE THE DRP. HOWEVER, THIS WAS HOWEVER, NOT SUCCESSFUL. DRP WAS OF THE OPINION THAT ASSESSEE COULD NOT HAVE ADOPTED MULTIPLE YEAR DATA. IT CONFIRMED THE VIEW TAKEN BY THE TPO IN ALL OTHER RESPECTS. THE DRP HOW EVER HELD THAT THE ADJUSTMENT TO ALP HAD TO BE DONE ONLY IN RESPECT OF THE INTERNATIONAL TRANSACTION WITH THE AE AND NOT ON THE TRANSACTIONS WITH NON-AE. TO THIS EXTENT THE DRP GRANTED RELIEF TO THE ASSESSEE. THE AO THEREAFTER, ACCEPTED THE RECOMMENDATION OF THE TPO AND MADE AN ADDITION BASED ON TNM METHOD. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 7. AT THE TIME OF HEARING, IT WAS BROUGHT TO OUR N OTICE THAT ON IDENTICAL FACTS, SIMILAR ORDER WAS PASSED BY THE TPO FOR A.Y. 2008-09 AND CONFIRMED BY DRP. THIS TRIBUNAL, IN IT(TP)A NO.1022/BANG/201 2 IN AN APPEAL FILED BY THE ASSESSEE FOR THE A.Y. 2008-09 ON AN IDENTICA L ISSUE, HELD THAT THE IT(TP)A NO.224/BANG/2014 PAGE 5 OF 11 MOST APPROPRIATE METHOD FOR DETERMINING THE ARMS L ENGTH PRICE (ALP) IN THE CASE OF ASSESSEE WOULD BE RPM. A COPY OF THE A FORESAID ORDER OF THE TRIBUNAL DATED 17.10.2014 WAS FILED BEFORE US. THE LEARNED DR RELIED ON THE ORDER OF THE TPO/AO/DRP. 8. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RI VAL SUBMISSIONS. IT IS NOT IN DISPUTE BEFORE US THAT THE BASIS ON WHICH AD DITION WAS MADE IN AY 08-09 WHICH WAS CONSIDERED BY THIS TRIBUNAL IN ITS ORDER REFERRED TO IN THE EARLIER PARAGRAPH OF THIS ORDER AND THE BASIS ON WH ICH THE ADDITION WAS MADE IN THE PRESENT AY ARE IDENTICAL. THIS TRIBUNA L ON AN IDENTICAL DISPUTE IN ASSESSEES OWN CASE, HELD AS FOLLOWS: 16. NOW BEFORE US, LEARNED AR STRONGLY ASSAILING THE SUBSTITUTION OF METHOD SUBMITTED THAT NO PROPER REASONING WAS GIVE N BY THE AUTHORITIES BELOW FOR REJECTING THE RE-SALE PROPER METHOD. AS PER THE LEARNED AR, ASSESSEE WAS IMPORTING THE GOODS FROM I TS ASSOCIATED ENTERPRISES AND SELLING IT IN THE LOCAL MARKET WITH OUT ANY VALUE ADDITION. ONLY WORK DONE BY THE ASSESSEE ON SUCH GOODS WAS TO RE-PACK IT ACCORDING TO THE LOCAL REQUIREMENTS. AS PER THE LEARNED AR ASSESSEE HAD MADE A PROPER ANALYSIS AS REQUIRED UNDER THE TP REGULATIONS AND GAVE REASONS WHY IT HAD ADOPTED THE RPM METHOD. ASSESSEE HAD POINTED OUT THAT IT WAS HAVING PURCHAS ES AND SALE FROM UNRELATED ENTERPRISES ALSO, AND WAS NOT SOLELY DOING THE BUSINESS OF IMPORTING GOODS FROM ASSOCIATED ENTERPR ISES AND SELLING IT IN THE LOCAL MARKET. AS PER THE LEARNED AR, ASS ESSEE WAS A TRADER SIMPLICITIER. IT HAD ANALYSED 612 COMPANIES WHICH WERE IMPORTING CONSUMER DURABLES FOR RE-SALE AND OUT OF THAT SELEC TED 5 COMPANIES AS PROPER COMPARABLES, WHILE WORKING OUT THE ALP. THE TPO HAD REJECTED THE TP DOCUMENTATION FOR VAGUE REASONS. W HEN ASSESSEE WAS BUYING AND SELLING GOODS THE BEST METHOD AS PER THE LEARNED AR WAS RPM. ASSESSEE WAS RECEIVING FINISHED GOOD S FROM THE ASSOCIATED ENTERPRISES AND SELLING IT, ACTING AS A FULL FLEDGED DISTRIBUTOR OF THE ASSOCIATED ENTERPRISE. WHEN THE PROPERTY OR SERVICES PURCHASED FROM THE ASSOCIATED ENTERPRISES WAS RE-SOLD TO AN UNRELATED PARTY WITHOUT ANY VALUE ADDITION, AS P ER THE LEARNED AR, RPM WAS THE BEST METHOD. RELIANCE WAS PLACED ON TH E DECISION OF IT(TP)A NO.224/BANG/2014 PAGE 6 OF 11 MUMBAI BENCH OF THIS TRIBUNAL IN THE CASE OF ITO VS M/S LOREAL INDIA PVT.LTD.,(ITA NO.5423/MUM/2009 DATED 25-04-20 12), M/S STAR DIAMOND GROUP VS DDIT (ITA NO.3923/MUM/2008 DATED 28-01- 2011 THAT OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S TEXTRONIX INDIA PVT. LTD., VS DCIT(ITA NO.1334/B/2 010) AND M/S MATTEL TOYS(I) PVT.LTD., VS DCIT(ITA NO.2810/M/20 08 DATED 12-06- 2013) AND M/S FRIGOGLASS INDIA PVT.LTD., VS DCIT (ITA NO.463/DEL/2013 DATED 11-04-2013) AND THAT OF M/S T UPPERWARE INDIA PVT. LTD., VS DCIT (ITA NO.2140/DEL/2011 DATE D 29-08-2014). 17. PER CONTRA, LEARNED DR SUBMITTED THAT SELECTIO N OF MOST APPROPRIATE METHOD FOR EVALUATION OF INTERNATIONAL TRANSACTIONS WAS RESPONSIBILITY OF BOTH THE PARTIES AND NOT THAT OF THE TPO ALONE. ACCORDING TO HIM, ASSESSEE HAVING USED THE MULTIPLE YEAR DATA AND HAVING NOT FOLLOWED THE PROCEDURE PRESCRIBED UNDER THE RULES, COULD NOT SAY THAT THE TPO HAD ERRED IN ADOPTING TN M METHOD. AS PER THE LEARNED DR, THE TPO HAS SPECIFICALLY MENTIO NED AT PARA-5 OF HIS ORDER THE REASONS WHY HE WAS REJECTING THE RPM METHOD. ASSESSEE COULD NOT ESTABLISH THE FUNCTIONAL SIMILAR ITY OF THE PRODUCT IMPORTED AND SOLD BY IT WITH THAT OF THE COMPARABLE S SELECTED BY IT. THEREFORE, ACCORDING TO HIM, THE LOWER AUTHORITIES HAD TAKEN A CORRECT VIEW ON THIS ISSUE. 18. WE HAVE PERUSED THE ORDER, AND HEARD THE RIVAL CONTENTIONS. THERE IS NO DISPUTE THAT THE ASSESSEE HAD FOLLOWED RPM METHOD FOR ANALYZING ITS INTERNATIONAL TRANSACTIONS RELATING T O GOODS IMPORTED BY IT FROM ITS ASSOCIATED ENTERPRISE ABROAD AND SOLD H ERE IN THE LOCAL MARKET. THERE IS ALSO NO DISPUTE THAT THE ASSESS EE WAS IMPORTING THESE GOODS IN THE FINISHED STAGE AND SELLING IT WI THOUT MAKING ANY VALUE ADDITIONS THEREON. THE ONLY WORK RENDERED BY THE ASSESSEE WAS RE-PACKING THE CARTONS RECEIVED FROM ITS SUPPLI ER ABROAD. IN OTHER WORDS, ASSESSEE WAS ACTING PURELY AS A TRADE R. RULE 10C OF THE RULES REQUIRES ADOPTION OF THE MOST APPROPRIATE METHOD WHICH BEST SUITS THE FACTS AND CIRCUMSTANCES OF EACH OF P ARTICULAR INTERNATIONAL TRANSACTION AND WHICH PROVIDE MOST RE LIABLE MEASURE OF AN ALP IN RELATION TO THE INTERNATIONAL TRANSACTION S. IT IS AN ACCEPTED POSITION THAT THE ENTIRE TRADING OF THE AS SESSEE DID NOT COMPRISE OF IMPORTS FROM ASSOCIATED ENTERPRISE AND SELLING IT IN LOCAL MARKET. THERE WERE SUBSTANTIAL LOCAL PURCHASES AS WELL. THAT RPM METHOD IS THE MOST APPROPRIATE METHOD WHEN ASSESSEE IS SELLING GOODS PURCHASED FROM THE ASSOCIATED ENTERPRISES AS SUCH, HAS BEEN HELD BY THE MUMBAI BENCH IN THE CASE OF M/S LOREAL INDIA PVT. LTD., (SUPRA), THE CO-ORDINATE BENCH AT PARA-19 OF ITS O RDER HAD HELD AS UNDER; IT(TP)A NO.224/BANG/2014 PAGE 7 OF 11 19. DURING THE COURSE OF HARING LD. DR ALSO SUPPORTED THE METHOD CONSIDERED BY TPO AND REFERRED TO PARA 2.29 OF OECD GUIDELINES 2010 AS STATED HEREIN ABOVE. ON THE OTHER HAND, LD.AR JUSTIFIED THE RPM METHOD ADOPTED BY IT AND ALSO REFERRED TO ORDER OF TPO IN THE PRECEDING ASSESSMENT YEARS AS WELL AS SUCCEEDING ASSESSMENT YEARS TO THE ASSESSMENT YEAR UNDER CONSIDERATION TO SUBSTANTIATE THAT RPM IS THE MOST APPROPRIATE METHOD TO DETERMINE ALP. HE SUBMITTED THAT THE ASSESSEE MADE ADJUSTMENT FOR MAKING AND SELLING EXPENSES TO THE PROFITS TO MAKE IT COMPARABLE TO THE COMPARABLE COMPANIES PROFITS. WE AGREE WITH LD.CIT(A) THAT THERE IS NO ORDER OF PRIORITY OF METHODS TO DETERMINE ALP. RPM IS ONE OF THE STANDARD METHOD AND OECD GUIDELINES ALSO STATES THAT IN CASE OF DISTRIBUTION AND MARKETING ACTIVITIES WHEN THE GOODS ARE PURCHASED FROM AES WHICH ARE SOLD TO UNRELATED PARTIES, RPM IS THE MOST APPROPRIATE METHOD. IN THE CASE BEFORE US, THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE BUYS PRODUCTS FROM ITS AES AND SELLS TO UNRELATED PARTIES WITHOUT ANY FURTHER PROCESSING. FURTHER, THE ASSESSEE HAS ALSO PRODUCED CERTIFICATES FROM ITS AES THAT MARGIN EARNED BY AES ON SUPPLIES TO THE ASSESSEE IS 2% TO 4% OR EVEN LESS. THE DEPARTMENT HAS NOT DISPUTED THE ABOVE CERTIFICATES. THEREFORE, THE TPOS CONTENTION THAT AES HAVE EARNED HIGHER PROFIT IS NOT BASED ON FACTS. ON THE OTHER HAND, WE AGREE WITH LD.CIT(A) THAT THE MARGIN OF PROFIT EARNED BY AES THEMSELVES IS ALSO REASONABLE AND THEREFORE, IT COULD NOT BE SAID THAT THERE IS SHIFT OF PROFITS BY THE ASSESSEE TO ITS AES AT OVERSEAS. CONSIDERING THE FACTS OF THE CASE AND ALSO THE ORDER OF TPO THAT RPM METHOD HAS BEEN ACCEPTED IN THE PRECEDING AS WELL AS SUCCEEDING ASSESSMENT YEARS TO THE ASSESSMENT YEAR UNDER CONSIDERATION IN RESPECT OF DISTRIBUTION SEGMENT ACTIVITY OF THE ASSESSEE, WE DO NOT FIND ANY INFIRMITY WITH THE ORDER OF THE LD.CIT(A) IN DELETING THE ADDITION OF IT(TP)A NO.224/BANG/2014 PAGE 8 OF 11 RS.4,90,07,000/- MADE BY THE AO. GROUND NO.2 IS ACCORDINGLY REJECTED BY UPHOLDING THE ORDER OF THE LD.CIT(A). SIMILARLY IN THE CASE OF M/S STAR DIAMOND GROUP VS DDIT (SUPRA), IT WAS HELD UNDER AT PARA-13 OF ITS ORDER AS FOLLOWS; 13. THIS FINDING IN OUR HUMBLE OPINION IS WRONG FOR THE REASON THAT THE CIT(A) HAS ADOPTED THESE VERY COMPARABLES, ALONG WITH THREE OTHER WHILE ARRIVING AT THE OPERATING MARGINS AT PARA-7.16 OF HIS ORDER. AS THE ASSESSEE IS A TRADER, WITHOUT VALUE ADDITION TO THE GOODS, WE FIND FORCE IN THE SUBMISSION OF THE ASSESSEE THAT RESALE PRICE METHOD IS THE MOST APPROPRIATE METHOD FOR DETERMINING THE ALV WITH RESPECT TO AE TRANSACTION. IN FACT, THE REVENUE HAS ACCEPTED THIS METHOD IN EARLIER TWO YEARS. THE TRANSFER PRICING OFFICER IN HIS ORDER DATED 7-3-2005 FOR THE ASSESSMENT YEAR 2002-03 AND ORDER DATED 20-03-2006 FOR THE ASSESSMENT YEAR 2003-04, HAS AGREED WITH THE COMPUTATION OF ARMS LENGTH PRICE MADE BY THE ASSESSEE UNDER THE RESALE PRICE METHOD. IF THE COMPARABLES ARE NOT FOUND APPROPRIATE, FRESH COMPARABLES CAN BE SEARCHED, BUT THE METHOD ADOPTED NEED NOT BE REJECTED. IN ANY EVENT, AS THE COMPARABLES GIVEN BY THE ASSESSEE I.E FLAWLESS DIAMONDS AND PROFESSIONAL DIAMONDS ARE NOT IN BUSINESS OF PURCHASE AND SALE OF ROUGH DIAMONDS, IT WOULD HAVE TO SET ASIDE OF THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION, SO AS TO ENABLE BOTH THE ASSESSEE, AS WELL AS THE AO TO UNDERTAKE A FRESH EXERCISE, BY FINDING OUT APPROPRIATE COMPARABLES AND ADOPTING RESALE PRICE METHOD. BEFORE DOING SO WE OBSERVE AS FOLLOWS; THE CO-ORDINATE BENCH IN THE CASE OF M/S TEXTRONIX INDIA PVT.LTD., VS DCIT(SUPRA), AT PARA-6 OF ITS ORDER HELD AS UNDE R; IT(TP)A NO.224/BANG/2014 PAGE 9 OF 11 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE DISPUTE IS WITH REGARD TO THE ALP IN RESPECT OF INTERNATIONAL TRANSACTIONS WHEREBY THE ASSESSEE IMPORTS EQUIPMENTS FROM ITS AE AND RE-SELLS THEM WITHOUT ANY VALUE ADDITION TO THE INDIA CUSTOMERS. IN SIMILAR CIRCUMSTANCES, MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S LOREAL INDIA PVT.LTD.,(SUPRA) HAS TAKEN THE VIEW THAT THE RPM WOULD BE THE MOST APPROPRIATE METHOD FOR DETERMINING THE ALP. THE MUMBAI BENCH OF THE TRIBUNAL, IN THIS REGARD, HAS REFERRED TO THE OECD GUIDELINES WHEREIN A VIEW HAS BEEN EXPRESSED THAT RPM WOULD BE THE BEST METHOD WHEN A RE-SALE TAKES PLACE WITHOUT ANY VALUE ADDITION TO A PRODUCT. IN THE PRESENT CASE, THE ASSESSEE BUYS PRODUCTS FROM THE AE AND SELLS IT WITHOUT ANY VALUE ADDITION TO THE INDIAN CUSTOMERS. IN SUCH CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE RATIO LAID DOWN Y THE MUMBAI BENCH OF THIS TRIBUNAL IN THE SE OF M/S LOREAL INDIA PVT.LTD., (SUPRA), WOULD BE SQUARELY APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. 19. THE ONLY DISCERNABLE REASON WHY THE TPO HAS REJ ECTED THE RE- SALE METHOD ADOPTED BY THE ASSESSEE TO OUR EYES IS THAT ASSESSEE HAD GIVEN MULTIPLE YEAR DATA OF COMPARABLES. THE D ATA GIVEN BY THE ASSESSEE FOR THE FIVE COMPARABLES SELECTED BY IT WE RE AS UNDER:- COMPANY NAME 2006 12 MONTHS 2007 12 MONTHS 2008 12 MONTHS WEIGHTED AVERAGE KHAITAN ELECTRICALS LTD 18.59 10.48 15.98 13.07 KHAITAN (IND.) LTD., 11.02 7.25 8.62 9.17 MEDIA VIDEO LTD., 12.12 11.24 - 11.57 PEERLESS DEVELOPERS LTD., 4.68 5.84 - 5.28 XPRO GLOBAL LTD., 7.96 15.01 21.84 18.35 ARITHMETIC MEAN (%) 10.87 9.96 15.48 11.49 LEARNED COUNSEL FOR THE ASSESSEE HAS STATED AT BAR THAT YEARS MENTIONED IN THE ABOVE TABLE WERE FINANCIAL YEARS ENDING 31-03- 2006, 31-03-2007 AND 31-03-2008. IF THAT BE SO, TH E TPO WAS HAVING RESULTS OF THE COMPARABLES SELECTED BY THE A SSESSEE FOR THE RELEVANT PREVIOUS YEAR AS WELL. IF THE TPO FOUND T HAT THE COMPARABLES WERE DEALING IN DIFFERENT TYPE OF GOODS , HE COULD SELECT IT(TP)A NO.224/BANG/2014 PAGE 10 OF 11 BY HIMSELF A SET OF COMPARABLES AFTER GIVING PROPER REASONS. THERE WERE MANY OTHER COMPANIES DEALING WITH GOODS SIMILA R TO THAT OF THE ASSESSEE. NOTHING STOPPED THE TPO FROM WORKING OUT THE ALP BASED ON THE DATA WHICH WAS AVAILABLE ON RECORD OR FROM GETTING A FRESH SET OF COMPARABLES, WHICH WAS APPROPRIATE IN HIS OPINION. IN OTHER WORDS, ACCORDING TO US, THE REASON FOR REJECT ING THE RE-SALE PRICE METHOD ADOPTED BY THE ASSESSEE WAS NOT CORREC T. IN OUR OPINION, RE-SALE PRICE METHOD WAS MOST APPROPRIATE METHOD IN THE FACTS AND CIRCUMSTANCES OF THIS CASE. 20. AS A NECESSARY COROLLARY TO THE ABOVE DISCUSSIO N, WE ARE OF THE OPINION, THAT THE AO/TPO HAS TO DO A FRESH ANALYSIS OF INTERNATIONAL TRANSACTION INVOLVING TRADING OF IMPORTED GOODS, CO NSIDERING RPM METHOD AS THE MOST APPROPRIATE METHOD. OTHER GROUN DS RAISED BY THE ASSESSEE WERE WITH RESPECT TO THE COMPARABLES, CONSIDERED BY THE TPO IN TNM METHOD STUDY, AND THIS HAS BECOME IR RELEVANT IN VIEW OF OUR FINDING THAT THE RPM METHOD WAS THE BES T SUITED ONE. 21. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE LEA RNED AO WITH REGARD TO THE ALP FIXATION OF INTERNATIONAL TRANSAC TION INVOLVING TRADING OF IMPORTED GOODS OF AES AND REMIT IT BACK TO THE AO FOR CONSIDERATION AFRESH BASED ON RPM METHOD AND IN ACC ORDANCE WITH LAW. 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THAT THE FACTS AND CIRCUMSTANCES UNDER WHICH THE ADDITION WA S MADE IN A.Y. 2009- 10 AND 2008-09 ARE IDENTICAL. IN A.Y. 2008-09, ON E OF THE REASONS GIVEN BY THE TPO WAS THAT COMPARABLE CHOSEN BY THE ASSESS EE HAD A DIFFERENT FINANCIAL YEAR ENDING. IN THE PRESENT AY THE COMPA RABLE COMPANY CHOSEN BY THE ASSESSEE/TPO HAS SAME FINANCIAL YEAR ENDING AS CAN BE SEEN FROM PARA 6.4.3 AND 6.4.6 OF THE ORDER OF THE TPO. 10. RESPECTFULLY FOLLOWING THE DECISION OF THE TRI BUNAL REFERRED TO ABOVE, WE HOLD THAT RPM IS THE MOST APPROPRIATE METHOD. T HE ORDER OF THE AO IS IT(TP)A NO.224/BANG/2014 PAGE 11 OF 11 ACCORDINGLY SET ASIDE AND THE ISSUE OF DETERMINATIO N OF ALP IS REMANDED TO THE TPO TO BE DONE AS WAS DIRECTED BY THE TRIBUNAL FOR A.Y. 2008-09. 11. FOR STATISTICAL PURPOSES, THE APPEAL OF THE AS SESSEE IS TREATED AS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF MARCH , 2015 . SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE, DATED, THE 27 TH MARCH , 2015 . /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR/ SENIOR PRIVATE SECRETARY ITAT, BANGALORE.