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IT(TP)A No.1109/Bang/2011 & CO 13/Bang/2012
15. In conclusion the Ld. CIT(A) in para 47 of the first appellate order has held that with the mean OP / TC margin of 14.04%, after availing the benefit of the (+/-) 5 percent range, the assessee's international transactions are proved to be at arm's length.
16. The decisions relied upon by the Ld. DR having distinguishable facts are not helpful to the revenue. In the case of ST Microelctronics PVt. Ltd. (supra) the assessee tried to establish that the role of the assessee in producing semiconductor (IC) was limited qua the role performed by ST group which was not accepted by the Tribunal with this observation that the assessee had employed more than 1600 persons and it was having one of the largest design centres out of the Europe and thus the operations carried out by the assesee within India were to be compared with other assesses and not with ST group. Thus the assessee failed to establish that this case was not comparable with the ST group. The Tribunal observed further that the assessee could have produced the report of an expert indicating the work performed by it was negligible in comparison to other software development companies. Similarly in the case of Symantec Software Solutions Pvt. Ltd. (supra) relied upon by the Ld. DR the Tribunal did not find any merit and substance in the submission of the assessee for adjustment in respect of risk and functional differences. The Tribunal held that what is relevant is the margin/profit the assessee earned from international transaction and comparison of the same with the uncontrolled transactions. The Tribunal held that if net revenue of the AE is negative then the assessee would get no remuneration, which is IT(TP)A No.1109/Bang/2011 & CO 13/Bang/2012 however irrelevant for the purpose of ALP determination. Actually this decision of Mumbai Bench relied upon by the Ld. DR is helpful to oppose the contention of the Ld. AR that the loans are normally part of business and the loss making companies should have also been considered as comparables by the TPO.