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TMI Blog2012 (11) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... examine those external comparables also alongwith internal comparables so as to come to a balanced finding on the matters relating to deciding of ALP and consequential adjustment called for, if any - matter remanded back. - IT Appeal No. 1842 (Mds.) of 2011 - - - Dated:- 27-8-2012 - Dr. O.K. Narayanan and Challa Nagendra Prasad, JJ. H. Padamchand Khincha for the Appellant. Shaji P. Jacob for the Respondent. ORDER O.K. Narayanan, Vice-President - This is a Transfer Pricing (TP) appeal. The assessment year is 2007-08. It is filed by the assessee. It is directed against the order of the assessing authority passed under section 143(3), read with sections 92CA and 144C(5) of the Income-tax Act, 1961. The Transfer Prici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing the information to the appellant. 3. Rejecting internal comparables selected by the appellant and rejecting transfer pricing analysis of the appellant. 4. Doing fresh transfer pricing analysis and adopting inappropriate filters in doing fresh transfer pricing analysis. 5. Selecting inappropriate comparables and rejecting appropriate comparables. 6. Inappropriately computing the operating margins of comparables and the appellant. 7. Not restricting the TP adjustment to AE transactions only. 8. Not making proper adjustment for enterprise level and transactional level differences between the appellant and the comparable companies. 9. Not allowing the benefit of the +/- 5% range mentioned in the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for, if any. 8. This is more because from the materials placed before us it is not seen whether the assessee has made segmental analysis before exclusively relying on internal comparables available at its disposal. Internal comparables are also influenced by various factors, which may distort the acceptability norm, if not examined with the touchstone of unbiased conclusion generated out of a study of external comparables. Therefore, the approach of TP study made in this case is inappropriate. Even if the assessee as well as the authorities below agree that the internal comparables are sufficient for the TP study in the present case, that does not justify the legal compulsion of examining the external comparables as well. An agreement, ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he process of the re-exercise also permits to adopt any other most appropriate method to determine the ALP, if the circumstances so warrant. 12. Regarding the other grounds relating to additions under section 14A and disallowance under section 10A, the assessing authority shall adjudicate the matter afresh after considering the latest case laws available on the topics. This direction is equally applicable to the rate of depreciation applicable to UPS as well. The levy of interest is consequential and as such does not call for any adjudication at this stage. 13. In result, this file is remitted to the TPO vis-a-vis to the Assessing Officer and the appeal is treated as partly allowed for statistical purposes. - - TaxTMI - TMITax - Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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