TPO can’t treat assessee as manufacturer for TP study if it was treated as trader in succeeding years: ITAT

  • Blog|News|Transfer Pricing|
  • < 1 minute
  • By Taxmann
  • |
  • Last Updated on 3 June, 2022

TP study; Transfer Pricing

Case Details: DCIT v. Toto India Industries (P.) Ltd. - [2022] 138 369 (Mumbai-Trib.)

Judiciary and Counsel Details

    • Prashant Maharishi, Accountant Member & Sandeep Singh Karhail, Judicial Member
    • Ms. Vatsalaa Jha, (CIT) for the Appellant.
    • Dhanesh Bafna for the Respondent.

Facts of the Case

The assessee company was engaged in the business of manufacturing, repairing, modifying, installing, and trading sanitary wares. The assessee contended that it was trader with normal risk with respect to its international transaction pertaining to ‘purchase of finished goods’ and benchmarked its international transaction by applying the Resale Price Method.

However, the Transfer Pricing Officer (TPO) observed that the assessee was the manufacturer and not a mere reseller and rejected the application of RPM and applied TNMM for benchmarking international transactions. On appeal, the CIT(A) reversed the order of TPO. Aggrieved revenue filed an appeal before the Tribunal.


The Tribunal held that from the financial statements, it was evident that the assessee only earned income from the sale of traded goods and commission income during the relevant financial year. Further, the manufacturing license was taken note of by the Commissioner (Appeals), which also justifies the claim of the assessee as the trader during the relevant assessment year.

Further, it was also not being denied by the revenue that the TPO had accepted the assessee as a trader in succeeding assessment years. Thus, the assessee had rightly been characterized as a trader by the Commissioner (Appeals).

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied