Where all critical functions & risk is assumed by AEs, it is not permitted to re-characterize the facilitation service provided as trading activity

The two appeals filed against the order passed by the Deputy CIT were identical in facts and the issues rose. The core issue involved was the addition made by the AO on account of Arm’s length price determined by Transfer Pricing Officer and confirmed by Dispute Resolution Panel. Facts of A.Y. 2007-08 were being considered.

Brief Background of case

The assessee company was a wholly owned subsidiary of Mitsui & Co.Ltd, Japan, one of the leading sogo shosha (General

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