Troy Chemicals India Pvt. Ltd Vs CIT(A) (ITAT Mumbai)
ITAT Mumbai under Resale Price Method [RPM] focus is more on same or similar nature of products rather than similarity of products. Thus, TPO directed to include 5 companies as comparable for benchmarking international transaction.
Facts- The assessee is a subsidiary of Troy Corporation, USA and is primarily engaged in the trading of specialty chemicals, additives, etc., in India. During the year under consideration, the assessee has entered into an international transaction with Troy Siam Company Ltd., which is incorporated under the laws of Thailand, and is an indirect subsidiary of Troy Corporation, USA. Troy Siam Company Ltd. is engaged in the manufacturing of speciality chemicals used in paint, wood preservation, coatings and other allied industries.
For benchmarking the international transaction of purchase of finished goods and purchase return, the assessee adopted the Resale Price Method (“RPM”) as the most appropriate method. TPO by applying the arm’s length margin made an adjustment of Rs.2,39,98,806/- to benchmark the international transaction of the assessee on account of purchase of finished goods and purchase return of goods.
Thereafter, DRP rejected the objections filed by the assessee and upheld the exclusion of 13 companies selected as comparable by the assessee, inter alia, on the basis that these companies are engaged in trading of bulk chemicals, while the assessee is a distributor of specialty chemicals. In conformity with the directions issued by the DRP, the AO passed the impugned final assessment order. Being aggrieved, the assessee is in appeal before us.
