FULFORD INDIA LTD,MUMBAI vs. ASST CIT CIR 2(1)(2), MUMBAI
IN THE INCOME-TAX APPELLATE TRIBUNAL “K” BENCH,
MUMBAI
BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER
&
SMT. RENU JAUHRI, ACCOUNTANT MEMBER
0
7
Fulford (India) Ltd.
Platina Building, 8th Floor,
C-59, G-Block, Bandra
Kurla Complex, Bandra
(East), Mumbai-400098
v/s.
बनाम
ACIT, Circle-(2)(1)
Room No. 561, 5th Floor,
Aayakar Bhavan, M K
Marg, Churchgate,
Mumbai-400020
स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACF1795L
Appellant/अपीलार्थी
..
Respondent/प्रतिवादी
Assessee by :
Shri Madhur Agrawal
Revenue by :
Ms. Neena Jeph
Date of Hearing
27.02.2025
Date of Pronouncement
28.02.2025
आदेश / O R D E R
PER RENU JAUHRI [A.M.] :-
These appeals are filed by the assessee against the orders of the Learned
Assistant Commissioner of Income-tax, Circle 4(2)(1), Mumbai passed u/s.
143(3) r.w.s 144C(13) read with section 144B of the Income-tax Act, 1961
[hereinafter referred to as “Act”] for Assessment Years [A.Ys.] 2006-07 & 2007-
08. 2. The assessee has raised the following grounds of appeal:
AY 2006-07
P a g e | 2
ITA No. 7624/Mum/2014 & 415/Mum/2015
A.Y. 2006-07 & 2007-08
Fulford (India) Pvt. Ltd.
“1. Import of Active Pharmaceutical Ingredients ('APIs') Re-computation of the arms' length price of the international transaction in relation to import of by making an adjustment of Rs.3,09,21,351/-
(a) On the facts and circumstances of the case and in law, the Ld. Assessing
Officer ('the Ld. AO') and the Ld. Transfer Pricing Officer ('the Ld. TPO') erred in ascertaining the arm's length price of the international transaction of import of APIs from the Associated Enterprises ('AEs') at Rs. 41,44,486/- instead of Rs. 3,50,65,837/- as determined by the Appellant.
(b) The Ld. AO/ Ld. TPO erred in disregarding the economic characterisation of the Appellant without giving due regard to the functional analysis carried out by the Appellant.
(c) The Ld. AO/ Ld. TPO erred in disregarding the transfer pricing analysis carried out by the Appellant and in rejecting the Transaction Net Margin
Method ('TNMM') as the most appropriate method adopted by the Appellant and in selecting the Comparable Uncontrolled Method ('CUP') as the most appropriate method, which requires stringent comparability.
Import of formulations Re-computation of the arms' length price of the international transaction by making an adjustment of Rs. 4,13,72,000/- (a) On the facts and circumstances of the case and in law, the Ld. AO/ Ld. TPO erred in ascertaining the arm's length price of the international transaction of import of formulations from the AEs at Rs. 20,74,56,463/- instead of Rs. 24,88,28,463/- as determined by the Appellant. (b) The Ld. AO/ Ld. TPO erred in disregarding the economic characterisation of the Appellant without giving due regard to the functional analysis carried out by the Appellant for the AE-distribution segment (import of formulations from AE's and their sale in the local market) with the operating margin of the manufacturing segment of the Appellant. (c) Without prejudice to the above, the Ld. AO/ Ld. TPO erred in law and on facts, in disregarding the transfer pricing analysis carried out by the Appellant and also by confirming the reallocation of the expenses on Net Sales ratio between the AE distribution segment and the manufacturing segment as against the actual expense identified, to the extent possible, by the Appellant.
Benefit of (+/-) 5% range. (a) On the facts and circumstances of the case and in law, the benefit of (+/-) 5% A range available under proviso to section 92C(2) of the Act, be granted to the Appellant.
Each of the above grounds of appeal is without prejudice to the other grounds of appeal.”
AY 2007-08
“1. Import of Active Pharmaceutical Ingredients ('APIs') Re-computation of the arms' length price of the international transaction in relation to import of API by making an adjustment of Rs.6,44,29,287/-
(a) On the facts and circumstances of the case and in law, the Ld. Assessing
Officer ('the Ld. AO') and the Ld. Transfer Pricing Officer ('the Ld. TPO) erred in ascertaining the arm's length price of the international transaction of P a g e | 3
ITA No. 7624/Mum/2014 & 415/Mum/2015
A.Y. 2006-07 & 2007-08
Fulford (India) Pvt. Ltd.
import of APIs from the Associated Enterprises ('AEs') at Rs. 34,52,409/- instead of Rs. 6,78,81,696/- as determined by the Appellant.
(b) The Ld. AO/ Ld. TPO erred in disregarding the economic characterisation of the Appellant without giving due regard to the functional analysis carried out by the Appellant.
(c) The Ld. AO/Ld. TPO erred in disregarding the transfer pricing analysis carried out by the Appellant and in rejecting the Transaction Net Margin
Method ('TNMM') as the most appropriate method adopted by the Appellant and in selecting the Comparable Uncontrolled Method ('CUP') as the most appropriate method, which requires stringent comparability.
Import of formulations Re-computation of the arms' length price of the international transaction by making an adjustment of Rs. 6,40,24,887/- (a) On the facts and circumstances of the case and in law, the Ld. AO/Ld. TPO erred in ascertaining the arm's length price of the international transaction of import of formulations from the AEs at Rs. 23,15,00,163/- instead of Rs. 29,55,25,050/- as determined by the Appellant. (b) The Ld. AO/ Ld. TPO erred in disregarding the economic characterisation of the Appellant without giving due regard to the functional analysis carried out by the Appellant for the AE-distribution segment (import of formulations from AE's and their sale in the local market) with the operating margin of the manufacturing segment of the Appellant. (c) Without prejudice to the above, the Ld. AO/ Ld. TPO erred in law and on facts, in disregarding the transfer pricing analysis carried out by the Appellant and also by confirming the reallocation of the expenses on Net Sales ratio between the AE distribution segment and the manufacturing segment as against the actual expense identified, to the extent possible, by the Appellant.
Benefit of (+/-) 5% range. (a) On the facts and circumstances of the case and in law, the benefit of (+/-) 5% range available under proviso to section 92C(2) of the Act, be granted to the Appellant. Each of the above grounds of appeal is without prejudice to the other grounds of appeal.”
At the outset, Ld. AR has submitted that the assessee has opted to settle the dispute under the DTVSV Scheme, 2024 in respect of both the appeals. The declaration has been filed in form No. 1 on 17.12.2024 and Form 2 has been received on 31.12.2024. He has accordingly requested for permission to withdraw the appeals. 4. Ld. DR has not objected to the said proposition.
P a g e | 4
ITA No. 7624/Mum/2014 & 415/Mum/2015
A.Y. 2006-07 & 2007-08
Fulford (India) Pvt. Ltd.
In view of the above-stated facts, the appeal of the assessee is allowed to be withdrawn. 6. In the result, the appeals of the assessee are dismissed as withdrawn. Order pronounced in the open court on 28.02.2025. BEENA PILLAI RENU JAUHRI (न्यातयक सदस्य/JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER
Place: म ुंबई/Mumbai
दिनाुंक /Date 28.02.2025
अननकेत स ुंह राजपूत/ स्टेनो
आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to :
1. अपीलार्थी / The Appellant
2. प्रत्यर्थी / The Respondent.
3. आयकर आयुक्त / CIT
4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT,
Mumbai
5. गार्ड फाईल / Guard file.
सत्यावपि प्रवि ////
आदेशानुसार/ BY ORDER,
उि/सहायक िंजीकार (Dy./Asstt.