IT/ILT : Matter remanded to determine ALP of drug Mofetil when Assessing Officer had compared price of other drugs to determine ALP of Mofetil
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[2014] 48 taxmann.com 157 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'B'
Concord Biotech Ltd.
v.
Assistant Commissioner of Income-tax, Range-1, Ahmedabad*
N.S. SAINI, ACCOUNTANT MEMBER
AND KUL BHARAT, JUDICIAL MEMBER
IT APPEAL (TP) NO. 558 (AHD.) OF 2014
[ASSESSMENT YEAR 2009-10]
JUNE 30, 2014
Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm’s length price (Comparables and adjustments) - Assessment year 2009-10 - Assessee was manufacturing bulk drugs - Assessee sold drug Mofetil to its US AE - TPO noted that same product was sold to non-associate enterprise, but prices could not be compared as non-associated enterprises were in uncontrolled market - TPO observed that assessee sold Pencillin and Lovastatin in US market which were also generic drugs and earned profit margin of 106.25 per cent - He took this margin as percentage of margin in respect of Mofetil for sale in US market and made TP adjustment - No material had been brought by both parties to show what was profit earned in these drugs in India or other uncontrolled markets - Whether since in absence of relevant details, it could not be adjudicated whether normal gross profit in Mofetil should be same as gross profit in sale of Pencillin and Lovastatin, matter be remitted back for re-adjudication - Held, yes [Paras 21 to 23] [In favour of assessee/Matter remanded]
■■■
[2014] 48 taxmann.com 157 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'B'
Concord Biotech Ltd.
v.
Assistant Commissioner of Income-tax, Range-1, Ahmedabad*
N.S. SAINI, ACCOUNTANT MEMBER
AND KUL BHARAT, JUDICIAL MEMBER
IT APPEAL (TP) NO. 558 (AHD.) OF 2014
[ASSESSMENT YEAR 2009-10]
JUNE 30, 2014
Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm’s length price (Comparables and adjustments) - Assessment year 2009-10 - Assessee was manufacturing bulk drugs - Assessee sold drug Mofetil to its US AE - TPO noted that same product was sold to non-associate enterprise, but prices could not be compared as non-associated enterprises were in uncontrolled market - TPO observed that assessee sold Pencillin and Lovastatin in US market which were also generic drugs and earned profit margin of 106.25 per cent - He took this margin as percentage of margin in respect of Mofetil for sale in US market and made TP adjustment - No material had been brought by both parties to show what was profit earned in these drugs in India or other uncontrolled markets - Whether since in absence of relevant details, it could not be adjudicated whether normal gross profit in Mofetil should be same as gross profit in sale of Pencillin and Lovastatin, matter be remitted back for re-adjudication - Held, yes [Paras 21 to 23] [In favour of assessee/Matter remanded]
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