Case Law Details
In an appeal before Mumbai, ITAT, Nivea India Private Ltd. vs. DCIT, Mumbai [ITA No.121/M/2013, decided on 21.08.2017], briefly, the assessee being an Indian subsidiary of Beiersdorf AG (BAG). BAG was founded in Hamburg in 1882 and is a Global group of branded consumer goods. The assessee was engaged in marketing and distribution of Nivea products in India, filed its return of income for relevant AY on 31.10.2007 declaring total income at Rs. Nil. Along with the return of income, the assessee furnished report under Form-3CEB. The assessee in report under Form 3CEB reported international transaction with its Associated Enterprises. Thus, the Assessing Officer(AO) made reference under section 92CA(1) of the Income Tax Act, 1961(for short ‘the Act’) to Transfer Pricing Officer (TPO) for computation of Arm’s Length Price (ALP) in relation to international transaction.
In addition to the original ground of appeal, the assessee raised the following additional grounds of appeal:
“On the facts and in the circumstances of the case, the overseas associated enterprises being the least complex of the entities involved in supply of raw materials, packing materials and semi finished goods to the Appellant, which entered into the transaction in the capacity of low-risk manufacturers had to be taken as tested parties for the purpose of benchmarking analysis; and the price at which such products were supplied by the overseas associated enterprises i.e. mark-up of 4% on full cost being less than arm’s mark-up as per the fresh benchmarking analysis carried out by the Appellant, the transaction of the import of such product by the Appellant (aggregating to Rs. 7,51,51,003) may be held to be at arm’s length.”
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