The Delhi bench in Benetton India (P) Ltd. v. ITO (2012) 144TTJ449 held that where the assessee is carrying business in different segmental activities independent of each other the same are required to be analysed on transaction to transaction basis and not by combining all activities as the same may not be aligned due to different set of functions, risks and assets employed. In this case the assessee is found to have been involved in the following independent activities:
Manufacturing;
Buying house services to an associate for commission.
The assessee therefore employed a combination of CUP, cost plus and TNMM method viz a viz each set of transactions consisting of imports- finished goods and raw materials (CUP), purchase of Fixed Assets (CUP), payment of royalty- CUP, reimbursements- CUP, exports- TNMM, receipt of commission-TNMM and payment to expat- cost plus method.
Manufacturing;
Buying house services to an associate for commission.
The assessee therefore employed a combination of CUP, cost plus and TNMM method viz a viz each set of transactions consisting of imports- finished goods and raw materials (CUP), purchase of Fixed Assets (CUP), payment of royalty- CUP, reimbursements- CUP, exports- TNMM, receipt of commission-TNMM and payment to expat- cost plus method.
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