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TMI Blog2015 (12) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... the CUP as the most appropriate method becomes more imminent in a case where comparable uncontrolled transactions are internal. Adverting to the facts of the instant case, we find that the assessee itself admitted before the AO that the services provided to the AEs and non-AEs are similar. Since the internally uncontrolled comparable transactions of rendering similar services as provided to the AEs are available, we hold that the decision of the AO to apply CUP as the most appropriate method does not warrant any interference. We, therefore, approve the view taken by the AO in determining the ALP of the international transaction of `Service’ revenue from its AE on the basis of CUP method as against TNMM applied by the assessee. Here, it is pertinent to mention that the AO has confined himself only to the determination of ALP in respect of 'Service’ revenue by impliedly accepting the international transaction of 'Equipment supply’ revenue at ALP. Out of seven invoices raised on India Glycols Ltd., three invoices for ₹ 24,000/- each represent `Site visit’ to M/s India Glycols Ltd., for discussions about the work undertaken to be done by the assessee for them. These invoices r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken for delivery by the postal authorities, it transpired that the assessee had already shifted from the address given in the return of income at which the notice was addressed. On enquiry, the Department of Posts, Indraprastha Post Office, New Delhi, vide its letter dated 6.10.2007, confirmed that the notice was booked for delivery on 27.10.2006 by speed post and dispatched by them on 27.10.2006, but, the Dak could not be delivered to the addressee and the same was returned to the Income-tax Officer on 1.11.2006. Again, another notice u/s 143(2) of the Act was issued on 7.2.2007 on the same address which also met with the same fate. The AO got inquiry conducted and traced out the new address of the assessee. It was on this new address that one more notice u/s 143(2) was issued on 10.7.2007 which was duly served and the proceedings were attended by the authorized representative. The assessee challenged the late service of notice before the ld. CIT(A), who held that no notice u/s 143(2) was validly served upon the assessee within the prescribed time limit and hence assessment was bad in law. The Revenue is aggrieved against this finding returned by the ld. CIT(A). 4. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concession made by the ld. AR. This ground is, therefore, allowed. 5. The only other ground raised in this appeal is against the deletion of addition on account of transfer pricing adjustment. Succinctly, the facts as recorded in the assessment order are that the assessee is a company incorporated in the Netherlands which had set up a liaison office in New Delhi in 1997. In 1999, the company converted its liaison office in India to a branch office. The Indian branch office is primarily engaged in the designing of engineering and construction projects in the power, oil and gas, fertilizer and petrochemical sectors. During the year under consideration, the assessee reported an international transaction of rendering `Services to its AEs for a sum of ₹ 3,01,96,496/- and also earning of revenue from `Equipment supply to the tune of ₹ 29,16,764/-, totaling receipts from its AEs at ₹ 3,31,13,260/-. The assessee also declared transactions with non-AEs to the tune of ₹ 8,08,550/-. The assessee used the Transactional net margin method (TNMM) as the most appropriate method to demonstrate that its international transactions were at arm s length price (ALP). The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that in a case where goods/services are sold/provided to the related parties and instances of comparable uncontrolled transactions are also available, coupled with the fact that other attending circumstances also being similar or capable of adjustment, usually CUP is the most preferable method. Application of the CUP as the most appropriate method becomes more imminent in a case where comparable uncontrolled transactions are internal. Adverting to the facts of the instant case, we find that the assessee itself admitted before the AO that the services provided to the AEs and non-AEs are similar. Since the internally uncontrolled comparable transactions of rendering similar services as provided to the AEs are available, we hold that the decision of the AO to apply CUP as the most appropriate method does not warrant any interference. We, therefore, approve the view taken by the AO in determining the ALP of the international transaction of `Service revenue from its AE on the basis of CUP method as against TNMM applied by the assessee. Here, it is pertinent to mention that the AO has confined himself only to the determination of ALP in respect of `Service revenue by impliedly accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re are a number of such transactions, then all such transactions should be considered. In other words, in case of plurality of the comparable uncontrolled transactions, their average price is taken as a benchmark as per sub-clause (i). This has been provided in no unambiguous terms in section 92C of the Act, which deals with the computation of the ALP. First proviso to section 92C(2) states : `that where more than one price is determined by the most appropriate method, the arm's length price shall be taken to be the arithmetical mean of such prices . Ergo, it is manifest that in case of availability of a number of comparable uncontrolled transactions, it is the arithmetic mean of the price charged in all such transactions, which is considered for determining the ALP of an international transaction. In such a case, neither the AO nor the AO/Transfer Pricing Officer can resort to cherrypicking. 9. Reverting to the facts of the extant case, we find that the assessee has entered into transactions with two parties, namely, India Glycols Ltd., and Petron Engineering Construction Ltd. Total revenue from rendering of service to these two parties is ₹ 8,08,550/-. In all, ther ..... 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