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TMI Blog2012 (6) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. 2. The assessee is an exporter of minerals dealing in Barite Lumps, Bentonite Powder and Potash Feldspar Lumps. The assessee exports these minerals to its Associated Enterprise(AE) in the middle east and also other third parties. In order to compute the Arm s Length Price(ALP) to all the related cross border transactions, the assessee compared its sale to its AE with that of another company, M/s. IBC Ltd. As per the working furnished by the assessee, the ALP is US$ 26.12 per Metric Tonne(MT). The Assessing Officer worked out the ALP on comparison of assessee s transaction with M/s. Baramin Mexico. The computation of the Assessing Officer revealed another ALP of US$ 27.77 per MT. 3. The issue of deciding the ALP was referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Commissioner of Income-tax(Appeals), among other grounds. The Commissioner of Income-tax(Appeals) examined the case in detail. After considering the sale rates reported by the assessee in the case of sales made to AE and non AE entities, the Commissioner of Income-tax(Appeals) found that the actual difference between the rate was only US$ 1.65 per MT which worked out to 5.92%. He found that this 5.92% difference itself is not a real difference for reasons enumerated by him in the order. He found that the sale price of US$ 27.77 per MT and US$ 26.12 per MT are not significantly varying each other, especially when the volume of the transactions of the assessee had with its AE. The Commissioner of Income-tax(Appeals) accepted the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas the same to the third party was just 20 MT. He found that the volume of sales made to AE and volume of sales made to the third party are nowhere comparable and this position would definitely influence on fixation of sale price. He accepted the contention of the assessee that the sales made to M/s.Yeochem (S) P. Ltd. was not a regular one but only an occasional transaction and that too, a very small quantity for which the assessee had charged a little higher price. The same sale price is not feasible in respect of sales made to its AE, that to the extent around 9027 MT. He therefore, found that the comparison was not justified between the third party sales and AE sales. He deleted the addition of ₹ 20,73,411/- as well. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken just two transactions of its competitors which is unvouched and unsubstantiated and when an internal comparison is already there reliance on external comparison is not required. 9. We heard Smt. Anupama Shukla, the learned Commissioner appearing for the Revenue and Shri B.S.Purushottam, the learned Chartered Accountant appearing for the assessee. 10. The Commissioner of Income-tax(Appeals) in page 5 of his order has detailed the Barite Lumps sales made by the assessee to its AE and the third parties. It is seen that all the sales made to the third parties were made on CIF basis. The sales to AE were made on FOB basis. The sale rate on CIF terms was US$ 66 per MT. The FOB rate was US$ 28/29 per MT. The freight element in the CIF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any weightage to the tolerance limit of 5%. 13. Now, coming to the conclusion, we find that the Commissioner of Income-tax(Appeals) has considered the issues in a very detailed manner and arrived at just and proper conclusions. For the reasons discussed by us in the aqbove paragraphs, we agree with the Commissioner of Incometax( Appeals) that the disputed addition was not at all called for. 14. The Revenue, in the course of argument, has relied on the order of the Income-tax Appellate Tribunal, Delhi C Bench in the case of Global Vantedge P. Ltd. v. DCIT reported in 1 ITR (Trib) 326. The proposition made out in the said order is not relevant for the preset case. But as rightly pointed by the learned counsel appearing for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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