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TMI Blog2016 (8) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions, to determine the arm's length price, the TPO is required to give reasons as to why one of such methods is being preferred over the others. In the case in hand, as observed earlier, for 09 of the 12 international transactions, the order of the TPO is completely silent as to why for determining arm's length price qua them, he has preferred to discard the CUP method, when the same had been applied by the assessee. For the remaining 03 international transactions also, the reasons so given are found by us to be vague and non-specific. In the light of the observations made above, the TPO was required to give reasons for discarding the CUP method qua each of the transactions as all the 12 international transactions entered into by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of depreciation on moulds ? 5. Whether the Tribunal erred in not allowing the claim of sales tool expenses ? Qua question no. 1, Mr. Deepak Chopra, learned counsel appearing on behalf of the appellant sought a favourable opinion from us as according to him, the Tribunal had erred in law by remanding the matter back to the Transfer Pricing Officer ( for short the TPO) after holding that the TPO had not given any worthwhile reasons for discarding the Comparable Uncontrolled Price (CUP) method for determination of the arm's length price, the data for which had been supplied to him by the appellant-assessee. It was submitted on behalf of the appellant that adequate reasons had been given by the TPO for not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Purchase of fixed assets TNMM OP/Sales 21,37,15,816 4. Payment of export Commission CUP/TNMM - 7,44,24,255 5. Payment of royalty CUP/TNMM - 57,26,60,430 6. Payment of technical know-how fee CUP/TNMM - 18,88,50,000 7. Payment of technical assistance fee CUP/TNMM - 2,42,24,247 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CUP method. Even for the remaining 03 transactions, vague and non-specific reasons were found. As per Section 92-C of the Act, the arm's length price in relation to an international transaction is required to be determined by applying any of the methods provided in the Section, which include, amongst other methods, the CUP method as also the TNMM. When amongst others, both the above-referred methods are prescribed for determining the arm's length price and both have been applied by the assessee, then reasons as to why one over the other is being preferred, are required to be supplied by the TPO in the assessment order as the choice of one method over the other could work to the assessee's prejudice. Section 92-C(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd question of law is concerned, in view of the fact that while opining on question no. 1, we have upheld the order of the Tribunal remitting the matter to the TPO to determine the arm's length price after considering, in accordance with law, whether to apply the CUP method or otherwise, qua each of the international transactions entered into by the appellant, we feel that at this stage, no opinion on the 2nd question needs to be returned. However, after the passing of the fresh assessment order by the TPO, if the appellant is still aggrieved with the findings of the Tribunal qua this question, the appellant would be at liberty to raise this issue in the proceedings, which may ensue after the passing of the afore-referred fresh asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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