Resale Price Method Archives - Tax Heal https://www.taxheal.com/tag/resale-price-method Complete Guide for Income Tax and GST in India Tue, 03 Nov 2015 08:08:49 +0000 en-US hourly 1 https://wordpress.org/?v=7.1.4 Resale Price Method is the most appropriate method for benchmarking is in earlier years same has been accepted https://www.taxheal.com/resale-price-method-is-the-most-appropriate-method-for-benchmarking-is-in-earlier-years-same-has-been-accepted.html https://www.taxheal.com/resale-price-method-is-the-most-appropriate-method-for-benchmarking-is-in-earlier-years-same-has-been-accepted.html#respond Tue, 03 Nov 2015 08:08:49 +0000 http://taxheal.com/?p=2847 Where selection of TNMM by department had been found to be inappropriate by Tribunal in earlier years and assessee’s Resale Price Method had been accepted on identical facts, Resale Price Method is the most appropriate method for benchmarking assessee’s transaction of import of seeds to its AE in relevant year Seminis Vegetable Seeds (I) (P.)… Read More »

]]> Where selection of TNMM by department had been found to be inappropriate by Tribunal in earlier years and assessee’s Resale Price Method had been accepted on identical facts, Resale Price Method is the most appropriate method for benchmarking assessee’s transaction of import of seeds to its AE in relevant year

Seminis Vegetable Seeds (I) (P.) Ltd. v. DCIT  [Mum. ITAT]

ITA No. 365 of 2012

Date of decision: September 16, 2015

Facts of the case

The assessee is engaged in the business of processing and marketing of vegetable seeds. It is an indirect subsidiary of M/s Seminis Inc. USA. For the purpose of benchmarking its arm’s length margin, assessee applied Resale Price Method (RPM) by adopting gross profit to net sales (GP/Sales) as the Profit Level Indicator (PLI). The Transfer Pricing Officer, however, disregarded the assessee’s transfer pricing analysis by rejecting the Resale Price Method (RPM) method and instead adopted TNMM on entity level as the Most Appropriate Method (MAM). The aggrieved assessee went in Appeal before the Appellate Tribunal.

Decision of the Tribunal

The Tribunal observed that the entire transfer pricing adjustment has been made after rejecting the assessee’s method of benchmarking the transaction, that is Resale Price Method and instead by adopting TNMM as Most Appropriate Method (MAM) by the TPO. This selection of most appropriate method of TNMM by the department has been found to be inappropriate by the Tribunal in the earlier years and assessee’s Resale Price Method has been accepted. As a result of adopting Resale Price Method (RPM) as MAM, similar adjustments made in the earlier assessment years stand deleted. Therefore, the Tribunal held that, as a matter of judicial precedence and without there being any change of material facts and circumstances, the TPO/Assessing Officer is directed to adopt RPM as most appropriate method for benchmarking the transaction of import of seeds to its AE and carry out comparability analysis for benchmarking the assessee’s gross margin and determine the appropriate ALP.

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