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TMI Blog2017 (7) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... ee’s AE has not derived any benefit, it is not possible to apply the CUP method. In view of this, in the interest of justice, we remit the issue regarding application of the method whether the CUP Method or TNMM as a most appropriate method, to the file of AO to see whether the AE derived any benefit or mark up on the price charged by the vendor for supply of raw materials to assessee’s AE, which it has sold to assessee. - Appeal of assessee is partly allowed for statistical purposes. - I.T.A.No.208/Mds./2017 - - - Dated:- 3-4-2017 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER, AND Shri Duvvuru RL Reddy, JUDICIAL MEMBER For The Appellant : Mr.Ramakrishnan, C.A For The Respondent : Mr.Pathalavath Peerya, CIT, D.R ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard, we rely on the decision of this Hon ble Tribunal in the case of Doowon Automotive Systems India (P) Ltd. v. DOlT [2016] 76 taxmann.com 174 (Chennai - Trib.). 5. Without prejudice to Ground No. 3 and 4, the Dispute Resolution Panel erred in directing the Transfer Pricing Officer to re-compute the Arm s Length Price at entity level including transactions with Non-Associated Enterprises which is not in accordance with the provisions of the Act. 6. Without prejudice to Ground No. 3 to 5, the learned Transfer Pricing Officer and Dispute Resolution Panel have erred in not factoring the economic adjustments for the purposes of computing Arm s length price under Transactional Net Margin Method. 7. Without prejudice to Ground N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayed that the above additional grounds may be admitted in the interest of justice. Ld.D.R has not put any serious objection for admission of additional grounds. Accordingly, the additional ground is admitted. 3. Coming to ground No.2 is with regard to rejection of CUP Method as the most appropriate method and following TNMM by the TPO. 4. The ld.A.R submitted that the TPO has wrongly recorded in his order of Transfer Pricing that the assessee has not given evidence to support the claim of applicability of CUP method. He submitted that the TPO at page -4 of his order dated 29.01.2016 observed that the assessee in his documentation had chosen CUP Method as the most appropriate method for purchase of raw material from AE, the price on wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f to justify applicability of CUP. The back to back invoices as produced by the assessee in themselves are not sufficient to show that the AE has not derived any benefit or mark up on the price charged by the vendor for supply of material for AE, which it has sold to the assessee. The terms and conditions of the transactions between the AE and such vendors or the agreements between the AE and the vendor for supply of the material have not been produced by the assessee either before the TPO or before this Panel to justify its claim. This is always possible that those vendors are providing invoices with certain value to the AE as per agreement with the AE, as the material is to be supplied by the vendor directly to the customer (assessee in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has sold to the present assessee. Unless the assessee filed full details of financial statement to show that the assessee s AE has not derived any benefit, it is not possible to apply the CUP method. In view of this, in the interest of justice, we remit the issue regarding application of the method whether the CUP Method or TNMM as a most appropriate method, to the file of AO to see whether the AE derived any benefit or mark up on the price charged by the vendor for supply of raw materials to assessee s AE, which it has sold to assessee. With this observation, we remit the present issue for selection of appropriate method to the AO for fresh consideration. Since we have remitted the issue regarding selection of most appropriate method by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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