The Tribunal held that the associated enterprises performed significant distribution and marketing functions and bore commercial risks. Accordingly, the gross margin on sales constituted the appropriate Profit Level Indicator for benchmarking the international transactions. The order of the Commissioner (Appeals) was upheld. The Tribunal upheld the order of the Commissioner (Appeals), who accepted the assessee’s alternative benchmarking by treating the associated enterprises as the tested parties after examining appropriate comparables. The Transfer Pricing Officer’s selection of comparables without a proper search process was rejected. The Tribunal found that the lower authorities had failed to consider the assessee’s contention that the loans advanced to its associated enterprises constituted shareholder activities. The issue of arm’s length interest was, therefore, restored to the Assessing Officer/Transfer Pricing Officer for fresh adjudication.  The Tribunal held that, after insertion of Explanation (i)(c) to section 92B, corporate, financial and performance guarantees furnished on behalf of associated enterprises constituted international transactions. Guarantee commission was directed to be computed at 0.5 per cent.  The Transfer Pricing Officer imputed royalty on the footing that the assessee had created valuable brand rights used by its associated enterprises. The Tribunal held that the assessee itself did not own the brand and merely had a right to use it. Since the assessee was not the owner of the brand, no royalty could be imputed from the associated enterprises. The transfer pricing adjustment was deleted.  (AY. 2014-15).