9911796707
TMI Blog2013 (9) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction against Bisazza India Pvt. Ltd. - while adopting TNMM method only profit based comparison is advisable, but start point for every comparison is product which is subject matter of international transaction - fundamental start point for comparison is similarity amongst nature of transaction, which depends upon none other than transaction of product. Without first establishing similarity of product between two comparable how is it practically possible to judge FAR? If nature of transaction is dissimilar in product then that should lead to an incongruous result. economic analysis, therefore, of comparable companies as attempted by assessee was not proper in eyes of law primarily because of reason that those companies were admittedly manufacturing ' glass wares' and not 'glass mosaic', particularly when revenue department was in a position to lay hand to compare transaction of assessee with a comparable company also dealing in glass mosaic. This product is undisputedly identical with product of assessee manufactured. Without first establishing proximity of products it is difficult to hold that comparables are from same economic segment. And without having intimate economic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ather than collect information to defend ALP in respect of said international transaction which had already been completed - data of a private limited company as selected by TPO once communicated to assessee and assessee had been granted opportunity to refute same, then requirement of law has been fulfilled by TPO - Decided against Assessee. Arbitrary approach in selection of comparables - Held that:- if only one comparable is left then selection is as per lawcomparables which were selected by assessee were not identical in respect of product manufactured. TPO had found that only one company happened to be manufacturing same article i.e. Glass Mosaic. Moreover, comparables which were selected by assessee did not have same line of manufacturing activity - It is not correct to say that merely on ground that TPO could have laid hand on one comparable than he was expected to do more research - ALP can be computed even on basis of one comparable - Following decision of Haworth (India) P. Ltd. Versus Deputy Commissioner of Income-tax [2013 (8) TMI 421 - ITAT DELHI] - Decided against assessee. Application of 'Internal TNMM' - Some times it is find that internal comparables may have more d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tset, we have been informed that no specific issue has been raised in these grounds and these grounds are general grounds, therefore no particular legal adjudication is needed, hence, these are hereby dismissed. 3. Ground No.3 is reproduced below: "No intention of shifting profits The learned CIT(A) has erred in law and on facts by not appreciating the fact that as the Associated Enterprise has incurred losses, the Appellant has not incentive and intention to shift profits outside India." 3.1 The only contention of the assessee is that the Associate Enterprise (in short A.E.) Trand Group SPA has suffered losses, therefore, there was no intention of shifting of the profit outside India. We have examined this aspect carefully. The IT Act has prescribed Chapter X, incorporating therein, special provision relating to computation of income from International Transaction having regard to Arm's Length Price (in short A.L.P.). The Chapter applies where in an international transaction the Associated Enterprises (A.E.) enter into a mutual agreement or arrangement for the allocation or apportionment of any cost or expense incurred then such allocation or apportionment is to be determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rroneously reject the economic analysis of those comparable instances, is one of the major objection of the assessee. 4.1.1) This objection was further elaborated by Ld. A.R. Mr.Suhail Dutt that once the assessee has chosen the comparable cases, then it becomes the duty of TPO to find whether these cases are in fact comparable or not. Ld.A.R. has emphasized that the comparison can best be adjudged by FAR analysis. By placing reliance on an unreported decision of Mumbai Tribunal in the case of Bayer Material Science Pvt. Ltd. (ITA no. 7911/Mum/2010) he has pleaded that if the TPO was not satisfied as to the comparability of assessee's examples then he should have given a logical reason. Merely by stating that the product was not identical the TPO has summarily rejected the assessee's comparables, according Mr. Dutt. The allegation of ' cherry-picking' is also baseless. The TPO was duty bound to prove the allegation. He was required to reject each of the comparable instances as selected by the assessee. The TPO was first supposed to empty the basket of comparables of the assessee. As the exercise of determining ALP is inconceivable without any comparable case therefore the TPO is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that basis he has emphasized on 'functional similarity' rather than 'product similarity'. Ld. A.R. has tried to convey that where similar functions are undertaken then in an uncontrolled transaction that comparability analysis is sufficient and should be accepted, instead of chasing the uncontrolled transaction involving identical product. For instance, as per Mr. Butt, in the case of ALP of distributor of 'consumer goods' a similar economic characteristic is good enough for comparability study, instead of searching for a similar product. 4.1.3 ) Two more points has been raised by Mr. Butt. First , that the TPO must identify the infirmity in the selection of assessee's comparables, reliance placed on Philips Software Centre Pvt. Ltd. 119 TTJ 721 ( Bang.Trib.). Second, that TPO is authorized to carry fresh search only if there is any deficiency pointed out in assessee's comparables, reliance is placed on Mentor Graphics Noida Pvt. Ltd. 109 ITD 101/ 112 TTJ 408 ( Del. Trib.). 4.1.4) On the issue of rejection of economic analysis of the assessee Ld. A.R. has quoted Rule 10D(2) for the legal proposition that this Rule prescribes that the reliability of the data used by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, so the full text was also referred. 4.3) Having heard these submissions we have noted that undisputedly the assessee had given twelve comparable instances but it was noted that those instances were in respect of companies in the production of 'glass products'. As against that the assessee had manufactured 'glass mosaic'. Although it was informed that there was no major player in the glass mosaic sector but the Revenue Department has selected a comparable instance and bench marked the international transaction against Bisazza India Pvt. Ltd.( in short BIPL ). Although, it is correct that while adopting TNMM method only profit based comparison is advisable, but the start point for every comparison is the product which is the subject matter of international transaction. In our understanding, the logical procedure ought to be to first select the identical product and then the next step should be to compare the economic analysis. Otherwise, on this primary difference of the product, the entire exercise of economic analysis should get rejected. Meaning thereby, the importance of the product cannot be ignored. If the suggestion of the assessee is accepted then a very strange situatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandatory requirement is to use contemporaneous documentation because such exampleobviously reflect alike/ akin economic condition. Having common economic sense it is easy to mention that the use of current financial year data is more relevant as well as appropriate. The economic data and financial transaction of that very period always has higher degree of comparability, but it must an uncontrolled transaction so as to arrive at the ALP. Ex- post analysis or documentation can be used as a supplement but can not substitute the initial contemporary documentation. In the case of ACIT vs. Birlasoft Ltd. 47 SOT 437 it is held that the expression 'shall' used in Rule 10B(4) makes it abundantly clear that the current year data of an uncontrolled transaction is to be used for the purpose of comparability, while examining international transaction with an A.E. Rather in the case of Exxon Mobil Co. 46 SOT 294 it is held that the previous year data can be used only when it had influenced the current year price. Hence the suggestion of placing reliance on the TPO's selection for A.Y. 2008-09 is hereby rejected. 4.4.1) We would further like to append that relevant operation/s of a particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtunity enabling the assessee to place the correct instances. In case of unsatisfactory data, the TPO has to undertake the exercise of selection of most suited comparable. None of the essential step was taken by the TPO/AO, Ld. A.R. has pleaded. 4.6 This plank of the argument has been duly considered by us. As far as the process out lined in the case of Bayer Materials Science Pvt. Ltd.( supra ) is concerned no one can have any dispute. But it's application should be in true spirit. In the given circumstances of this case the first onus of selection of comparables was discharged by the assessee. Thereafter it became the duty of the TPO to find whether those were in fact comparable in all respect or not. At that juncture the TPO had emptied the basket of the comparables of the assessee by mentioning that the first criteria of similarity of the product had failed in the said selection of the assessee. Rather in this case a subtle allegation of the TPO was that the assessee has done cherry picking. Once the selection of the assessee had been discarded then begins the duty part of the TPO. He is duty bound to select most close comparable instances available to him being in the public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the assessment proceeding, the assessee had raised this legal objection that the comparable chosen for bench marking was incorrect because the data of the said company was not in public domain. It was submitted that the international transaction of the assessee company must not be bench marked against BIPL. However the director's report of BIPL for AY: 2005-06 was also provided to the assessee. The assessee had objected the selection of BIPL by assigning following reasons: "1. Any data which is publicly not available cannot be used for purpose of benchmarking the international transaction. 2. Any data which was not available with the assessee at the time of carrying out benchmarking analysis cannot be used by the transfer pricing officer. 3. There is lack of transparency and qualitative information in private data. 4. It is also submitted while applying TNMM there has to be at least 4 to 5 comparable companies to have appropriate comparison and benchmarking. 5. It is also submitted that Pino Bisazza is manufacturer of Glass Mosaic and does not undertake any activities relating to marketing, distribution or sales production." 5.2 The TPO had examined all those objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there were no comparable companies in the business of glass mosaic. 5.5. Even before learned CIT(A) this contention was raised however it was rejected mainly on the ground that as per Circular no.14 of 2001 issued by CBDT the availability of data is more important rather than availability of data in public domain. The TPO has shared the financial data of BIPL with the assessee, therefore, the compliance of the provisions of the Act were satisfied. Thus, according to ld. CIT(A) when there is no legislative provision which requires mandatory use of data in public domain for the purpose of bench marking then the issue raised by the assessee lacks legal sanctity. 5.6. Before us learned A.R. has argued that the information which can be legally obtained and reasonably available to a tax payer must be used for bench marking. The information to which assessee had no access can not be used against the assessee. The assessee could not get access to those information therefore should not be used for comparability analysis. Ld. A.R has emphasized that section 92C(2) Rule 10C(2) prescribes that certain factors such as availability, coverage and reliability of data should be taken into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etwork India Pvt. Ltd. 51 SOT 191 (Bang) is cited for the legal proposition that the TPO is not required to inform the assessee about the process used by him for issuing the notices under Section 133(6) of the IT Act. The TPO is empowered to utilize the provisions of section 123 of IT Act to obtain such information. In this context, OECD guidelines (para no.3.36) is referred, relevant portion is reproduced below: "Tax administrators may have information available to them from examination of other taxpayers or from other sources of information that may not be disclosed to the taxpayer. However, it would be unfair to apply a transfer pricing method on the basis of such data unless the tax administration was able, within the limits of its domestic confidentiality requirements, to disclose such data to the taxpayer so that there would be an adequate opportunity for the taxpayer to defend its own position and to safeguard effective judicial control by the courts." 5.8 Ld. D.R. has argued that the guidelines prescribed that certain documents is required to be maintained by the assessee in support of its claim of ALP. However, as per the provisions of transfer pricing regulation, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it would be unfair to apply TNMM on the basis of such data unless it is disclosed within the limits of confidentiality requirement, to the tax payer. A tax payer has a right to defend its own position. He has thus pleaded that there is no qualification that such material must be available in public domain. The D.R. has thereupon discussed OECD guidelines 2010 which prescribes different kinds of approaches for the selection of potential comparable. One of such approach is called "additive approach" in which a search is carried out and a list of third party is prepared which are believed to carry out potential comparable transactions. However, as per OECD guidelines such "additive approach" has no restriction or requirement that the selection of companies should be made only from public domain. As per the argument of ld. D.R. TPO has not erred in selecting only one comparable while applying TNMM as the most appropriate method. There is no mandate for selection of more than one comparable for the purpose TNMM, case law cited Haworth India Pvt. Ltd. 131 ITD 215 (Delhi). 5.9. On hearing the submission of both the sides at length, we have noted that the TPO had exercised his powers by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter issuing notices under Section 136(6) is required to be communicated to the assessee and the AO is under obligation to furnish the entire information to the assessee. In the present case, since the undisputed fact is that the assessee had in fact been given an opportunity to contradict the material gathered by the TPO therefore we are of the considered opinion that there was no infringement of the natural justice. 5.10 Both the sides have referred OECD guidelines (para 3.36). On careful reading we have noted that the tax administrator has more information available to them. But the requirement is that it would be unfair to apply those information against the assessee, unless that data/information is disclosed to the assessee so that the assessee can safeguard its legal interest. Therefore the law has few segments. As per one segment a duty has been casted upon the assessee to keep and maintain the documents to justify the ALP. The other segment is that the TPO can, on his own, make search of comparable cases. This power is enshrined under the Act but with a rider that the information so gathered should be handed over to the assessee to grant him proper opportunity to present h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of decisions a view has been conveyed that a single company cannot be considered as a good comparable company for the purpose of bench marking, an argument has been raised before us. 6.2 There was a discussion of a decision of Haworth India Pvt. Ltd. 131 ITT 215 for the legal proposition that a single comparable company can be taken for benchmarking. On this the learned AR has drawn a distinction that in the said cited decision the single comparable as selected by the TPO was factually available in public domain. However, in the present case the case selected by the TPO was not in public domain. He has concluded that since the TPO had selected only one comparable therefore the said basis is required to be rejected. 6.3 From the side of the Revenue, learned DRs have contended that there is no such condition in law which mandates selection of more than one comparable for the purpose of TNMM application. Learned DR has again placed reliance on Haworth India Pvt. Ltd. 131 ITT 215 for the legal proposition that there was no requirement for fresh search to be taken by the TPO because the comparable selected was identical with the business activity of the assessee. In this precedent a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PL as BIPL undertakes selling & marketing activities. 7.3 The learned CIT(A) also erred in law and on facts in disregarding certain facts in case of BIPL such: substantial controlled transactions, auditors qualification with respect to transfer pricing policy, absence of other qualitative information." 7.1 In these grounds, the assessee has raised a basic contention that the BIPL was also having "controlled transactions" hence should not have been chosen as a comparable. For the purpose of comparability, learned AR has argued that, as per the definition of uncontrolled transaction in the terms of Rule 10A(a) the comparability of an international transaction ought to have been done with an uncontrolled transaction. The comparison could have been judged with reference to function performed, risk involved, etc. As per the definition of "Arms Length Price", means a price applied in transaction between the assessee, other than associated enterprises, which should be an uncontrolled transaction. Rather learned AR has cited few sections of this chapter wherein the Act has insisted to select an uncontrolled transaction. According to the argument of learned AR, a comparison could have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it had also made some local sales in the local market to the Poddar Group of the same product. The total export sales to the Associated enterprise i.e. Trand Group was Rs. 21,63,60,580/- and in the local market it was Rs.4,29,67,496/-. Learned AR has pointed out that the assessee had not considered sales to Poddar Group for the purpose of benchmarking. The reason to avoid was that the Poddar Group held 33% in the assessee company and hence the Poddar Group is also an Associate Enterprise. He has pleaded that if the condition of controlled transaction is ignored then sale to Poddar Group could have provided better comparability. 7.4 Learned AR has also quoted that the assessee had standard price list at which the goods were sold to Trand Group, as well as to Poddar Group. Since, the goods sold to Trand Group were large in quantity and significant amount was involved therefore the appellant had allowed 4.55% discount to Trand Group, whereas no such discount was allowed to Poddar Group. In this regard, we have been informed that as per the calculation the Operating Margin in respect of export sales to Trand Group was 7.47% whereas Operating Margin in respect of domestic sales to Podd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion how the TNMM method is affected. 7.7 About the suggestion of Internal TNMM consideration, Ld. DR has pleaded that an export transaction cannot be compared with the local sales. 7.8 This ground and the A.R's arguments have three limbs. The first limb of argument is that since the BIPL has "controlled transaction" therefore it can not be selected for comparison. Indeed one of the fundamental of determining ALP is that the transaction ought to be uncontrolled transaction. In this connection the case laws cited namely Philips Software Centre Pvt. Ltd. 119 TTJ 721 (Bang. Trib.), Mentor Graphic 109 ITD 101 (Del Trib) are very relevant wherein it is opined that the company having transaction with any related party should not be taken as comparable. It was also held that taking controlled transaction as comparable is against the very basics of Transfer Pricing guidelines. On the same lines, now we have to examine as to why a controlled transaction should not be considered for the purpose of comparability analysis in TNMM. In TNMM method the ALP of an international transaction is established by comparing the net margin with a comparable uncontrolled transaction. The assumption is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re related to the controlled transaction are to be separated, where they materially affect comparability with uncontrolled transaction. Further para 2.79 of OECD says that when net profit indicators of an independent enterprise are used, the profits attributable to the transactions of the independent enterprise must not be distorted by controlled transactions of that enterprise hence to be excluded to the extent if needed. After requisite adjustments the A.O. can arrive at a figure of ALP. We therefore take a decision that for this purpose the matter is required to be re-examined by the TPO/ AO, so direct accordingly. 7.9 Next, the second limb of argument is in respect of application of 'Internal TNMM'. Some times it is find that internal comparables may have more direct as also closer relationship to the transaction under consideration than external comparables. First similarity is the resemblance of the product. Likeness of the product exported with the product sold in domestic market can not be questioned. Even OECD guide lines have suggested an ideal situation with reference to the profit indicator that the same taxpayer earns in comparable uncontrolled transaction. The only p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of the assessee. On the other hand, the BIPL being controlling the marketing has the credit risk. In the case of Egain Communication Pvt. Ltd. 118 TTJ 354 (Pune) and in the case of Philips Softwares 119 TTJ 721 (Banglore) a ratio has been laid down that the functional comparability is a must to arrive at ALP. Therefore, we are of the view that the FAR analysis of BIPL is to be compared with FAR analysis of the assessee and the factors which are not matching are to be discarded and rest of the factors are required to be matched to a nearest possible figure. It is not out of place to mention here that once the product comparability is accepted therefore the rest of the analysis can be recalculated as per the guidelines discussed hereinabove. In the light of the discussion and after due consideration of all the three planks of the argument we hereby hold that ground no.7 of the assessee requires re-adjudication on the part of the AO, therefore, this ground may be treated as allowed for statistical purpose. 8. Ground no.8, 9 and 10 are reproduced below: "8. Risk Adjustment The learned CIT(A) erred in not allowing risk adjustment for differences in the risk profile of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new range of Glass Mosaic. It was contended that the trial batches were rejected due to certain defects. Substantial cost was incurred by the assessee. Learned CIT(A) has considered that argument and thereupon arrived at the conclusion that such expenditure was not normal cost and therefore required to be excluded while working out the operating profit. He has directed the AO to exclude the cost of Rs.62.08 lacs while working out the operating profit. Having heard the submissions of both the sides, we are of the view that this aspect can also be examined along with the other factors as demarcated while dealing ground no.7 (supra). Resultantly, we hereby hold that re-adjudication was required by the AO. Hence this ground of the revenue may be treated as allowed for statistical purpose. 9.2 In respect of ground no.2 of the Revenue, the assessee has informed that the total sales for the year was Rs.25,93,28,049/-. However, sale of international transaction was Rs.21,63,60,580/-. Learned CIT(A) has directed to computed transfer pricing adjustment only in respect of the value of international transaction. In the above paragraphs, we have already made a detailed discussion and aware ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her five AEs in Malayasia, Hongkong and USA. As far as the assessee is concerned it was found that the international transaction with its AE was as under: "International Transactions- During the year, Pino Bisazza has entered into following international transactions. Description of transaction Amount (Rs.) Purchase of raw material, stores & spares 67,67,963 Sale of glass mosaics 25,00,28,577 13.1 The analysis of the aforementioned international transaction was analyzed in the light of the following points:- "(a) Selection of Tested Party: In the Transfer Pricing Documentation submitted by the assessee, the assessee has selected Pino Bisazza (Indian company) as tested party, keeping in view complexity of functions performed, availability of comparable data and requiring minimum adjustment. The same is accepted as tested party for transfer pricing audit. (b) Selection of Most Appropriate Method : On the basis of functions performed, assets deployed and risks assumed by the assessee, Transaction Net Margin method (TNMM) has been chosen by the assessee as the most appropriate method and the same is accepted. (c) Selection of Profit Level Indicator (PLI): Since the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee has used costly raw material to manufacture the glass mosaic. On that basis, the TPO had concluded that the other glass industry cannot be compared with the assessee company. 14.2 Thereafter, the TPO had also made out a case that the assessee company had charged very less margin on cost in respect of transaction with AE, than the transaction with non AE. The product wise comparison is summarized as under:- Sale to Non AE Sale to AE Product -V-A GP/Cost 129.57% GP/Cost 3.67% Product-V-B GP/Cost 228.47% GP/Cost 18.94% Product - Brilliant GP/Cost 354.34% GP/Cost 3.82% 14.3 On the basis of the above comparison, the allegation of the TPO was that the assessee had charged less from its Associated Enterprise than the third party. 14.4 The TPO issued notices under Section 133(6)(2) (i) Italia Glass Pvt. Ltd, (ii) Karishma Mosaic Glass Pvt. Ltd. Those companies have submitted their audited account with the report. As far as the comparison with M/s. Karishma Mosaic Glass Pvt. Ltd. was concerned the profit shown was very high therefore it was not compared because of abnormal profit. The assessee was issued show cause notice, asking the assessee to explai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted that the TPO was required to demonstrate that the clauses of Section 92C(3) were attracted before proceeding to re-compute arm's length price. For this legal proposition reliance was placed on following three decision:- "(a) Philips Software Centre Private Limited Vs. CIT 119 TTJ 721 (Bang) (b) Mentor Graphics Noida P. Ltd. V. DCIT 109 ITD 101/ 112 TTJ 408 (Del) (c) ACIT vs. MSS India Pvt. Ltd. (2009-TIOL-416-ITAT-PUNE)" 14.6 According to the assessee, the comparables selected for bench marking the International Transaction were best comparable available and the bench marking was carried out in accordance with TP Regulation. So the assessee had objected that the use of any data which is not available to the public must not be used for bench marking. According to assessee a secret comparable is not be used to determine the ALP of an international transaction. Certain other points have also been raised such as that the Italia Glass Pvt. Ltd. (in short IGPL) had most of its transaction with related parties. It was informed that since substantial transactions were "control transactions" therefore such transaction ought not to be considered for the purpose of bench marking. Ano ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hod as the most appropriate method. The assessee had furnished certain comparables but those were in respect of products such as glass bottles, glass fibres, insulated glass, etc. On the other hand, the assessee manufactured a luxury product, i.e. Glass mosaic. Because of the aesthetic characteristic the glass mosaic was not compared with the normal glass products. The TPO had compared the product of the assessee with M/s. Italia Glass Pvt. Ltd. (IGPL). The assessee's main objection was that the data of IGPL was not publicly available. Hence, the international transaction must not be bench mark against IGPL. The objection of the assessee was that the AO was authorized for a fresh analysis only if the assessee was within the provision of section 92C(3) (c) of the Act. It was also objected that the assessee had earned net operating profit margin at 9% from its transaction with AE, whereas the comparable companies selected by the assessee had earned an average operating profit margin at 8.34%. It was also contested that the TPO had wrongly selected secret comparables of IGPL, being not in public knowledge. However, the DRP was not convinced and held that the comparables as selected by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s functions and assumes risks that are significantly different than that of the Appellant disregarding Rule 10B(1)(e)(iii) and 10B(3) of the Rules. 6. Without prejudice, adjustment to be mae with reference to international transaction Without prejudice, the learned AO/TPO and/or the DRP erred in making reference pricing adjustment considering sales to AEs as well as domestic sales instead of restricting adjustment with reference to international transaction only. Without prejudice, the learned AO/TPO and/or the DRP erred in computing Profit Level Indicator (PLI) of the appellant while applying TNMM to benchmark the international transactions. 7. Benefit of-/+5% range The AO/TPO and /or the DRP erred in law in not allowing the standard deduction of 5% as per the proviso to the section 92C(2) of the Act." 17. A propos to ground no.4, we have already expressed that the comparison of the product is an essential ingredient for determining the ALP. In the light of the foregoing paragraphs, we have held that the product manufactured by the comparables as selected by the assessee were not matching with the product of the assessee. Those comparable companies were manufacturing glass b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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