2017 (4) TMI 623

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..... olled transaction. Consequently, the entire basis of TP adjustment is incorrect and bad in law. The TP adjustment using the CUP method is accordingly deleted. However, the tribunal being the final fact finding authority, has to necessarily examine whether the international transaction entered by the assessee with its AE is at Arms Length using the other methodology prescribed under Rule 10B of the IT Rules. Moreover, the assessee has filed additional ground of appeal regarding computation of ALP under TNMM, hence, we remit this issue to the file of TPO for computation of ALP of international transactions as per TNMM and in accordance with law. - I.T.A. No. 115/Coch/2016 - - - Dated:- 7-2-2017 - SHRI B. P. JAIN, AM AND GEORGE GEORGE K., J .....

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..... reeze dried shrimps from India. The TPO collected the export details and corresponding invoices of this company u/s. 133(6). As per the TPO, the assessee was exporting freeze dried shrimps from India. The TPO collected the export details and corresponding invoices of this company u/s. 133(6). As per the TPO, the assessee was exporting freeze dried shrimps at an average price of $18 per kg whereas the comparable company was exporting the same at approximately $25 per kg. The TPO therefore inferred that the exports of the assessee to its parent company being an AE are not at arms length. When the assessee was confronted with the proposed TP adjustment, the assessee argued that AFDC cannot be considered as a comparable at all for multiple reas .....

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..... Ground No. 2 and 3 deals with the contention that the TPO erred in considering the transaction entered by AFDC with its AE, ICF, USA as a CUP for determining the TP adjustment. These grounds also deal with the other facets of TP adjustment like the products dealt by ICF, USA were not dealt with by the assessee and the TPO erred in not giving appropriate adjustment for the difference in transactions of assessee and that of ICF, USA. 5. The assessee has also filed an additional ground dealing with the contention that the ALP of international transactions of the assessee should be computed using the TNMM as the margins earned by the assessee fall within the range of acceptable range as provided under second proviso to section 92C(2) of the .....

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