Document Fragment View

Matching Fragments

The DRP on considering the aforesaid objection recorded that assessee has benchmarked its transaction of sale of Jewellery to its AE by using TNMM method and arrived at net margin of 10.02%. The TPO applied various filters like turnover filter, export filter and RPT filter, removed/ excluded following seven comparable.

i) Uni Design Jewellery Pvt. Ltd.

ii) Jewelex India Pvt. Ltd.

iii) Uni Design Elite Pvt. Ltd.

iv) Goldiam International Ltd.

v) Flawless Jewellery Pvt. Ltd. 

   (i)        Neysa Jewellery Ltd,
   (ii)       Golkunda Dimamonds & Jewellery Ltd.
   (iii)      Kanani Industries Ltd.,
   (iv)       Shantivijay Jewels Pvt Ltd,
   (v)        Sidds Jewellels Pvt. Ltd.
   (vi)       Shangold India Ltd,
   (vii)      Fine Jewelry Mfg Ltd

10. The DRP by recording of objection of assessee that a very low net margin arrived at by TPO which is uneconomical and unattractive for the industry, which is having high working capital and expectation of reasonable return on capital employed. If finance cost is factored into working of the profit will be further reduced, thus, concept of making more than ordinary profit as pre- requisite is not met in the case. The DRP was of the view that net margin arrived by assessee is apparently low and will be further lowered if cost of finance is factored in, the provisions of section 80IA(10) as well as other various transfer pricing provisions prescribed procedure for arriving at arm's length price in a systematic manner in the Act. The TPO has rigorously applied various filters as applicable. There cannot be exceptions on application of filters as to industry class or to any specific assessee. The DRP justified turn over filter, export turnover filter, RPT filter by referring various case laws. However, the DRP directed to remove Neysa Jewellery Limitedfrom the list of final comparables by holding that Neysa Jewellery ITA NO. 6477/Mum/2024 KBS Creations(AY: 2021-22) Limited is a loss making company. This comparable has shown consistent loss in FY 2018-19 and 2020-21.