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TMI Blog2019 (5) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in adopting the aggregated approach in the present facts. Thus, the view taken by the Tribunal of determining the ALP of sales to AE on the comparison of the aggregation of AE and non AE transactions (taking its arithmetical mean) does not call for any interference. No substantial question of law. TP Adjustment on export of Valves - Valves in Kit form to its AE in USA viz. Flow Serve Sulphur Spring (Flow Serve) - ITAT held that TPO had clearly made a fundamental error in determining the ALP of sales of vales and kits made to Flow Serve by comparing its margin with other sales by the respondent to its AEs in different parts of the world - HELD THAT:- We note that Chapter X of the Act is a special provision relating to avoidance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961 (the Act), challenges an order dated 16th December, 2015 passed by the Income Tax Appellate Tribunal (the Tribunal). This Appeal relates to Assessment Year 200405. 2. The revenue has urged the following questions of law for our consideration: ( A) Whether in the facts and circumstances of the case and in law was the Tribunal justified in upholding the order of CIT (A) benchmarking international transactions of sale of Valves to its Associated Enterprise (AE) viz. one L T LLC by aggregating all its transactions with the A.E. and comparing it with aggregation of all comparable Non AE transactions? ( B) Whether on the facts and circumstances of the case and in law was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final assessment order was passed by Assessing Officer. ( b) Being aggrieved on the above transfer pricing adjustment the respondent challenged it in appeal before the Commissioner of Income Tax (Appeals)(CIT (A)). In appeal the CIT (A) allowed the appeal of the respondent holding that during the year various standard valves were supplied not only to its AE i.e. L T LLC, USA but also to others i.e. non AE entities in USA. The CIT (A) found that in some cases the respondent charged higher rate from its AE and in other cases lesser than those charged to non AE's. However he was of the view that the AE and non AE transactions are to be separately aggregated, then the difference on aggregation of transactions is to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o point any flaw in the approach of the CIT (A) and the Tribunal in adopting the aggregated approach in the present facts. Thus, the view taken by the Tribunal of determining the ALP of sales to AE on the comparison of the aggregation of AE and non AE transactions (taking its arithmetical mean) does not call for any interference. ( e) Therefore, question No.1 as proposed does not give rise to any substantial question of law. Thus, not entertained. 5. Re:Question No. B ( a) During the assessment proceedings on a reference to the TPO, it was noted that the respondent had exported finished valves and valves in kit form to its AE i.e. Flow Serve Sulphur Spring (Flow Serve) USA and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n different geographical location i.e. different from the USA, thus not comparable. Therefore, allowed the appeal of the respondent assessee. ( c) The revenue being aggrieved, filed an appeal of the Tribunal. The impugned order of the Tribunal held that TPO had clearly made a fundamental error in determining the ALP of sales of vales and kits made to Flow Serve by comparing its margin with other sales by the respondent to its AEs in different parts of the world. The Tribunal held that in terms of the provision of the Act the comparison to determine the ALP cannot be done by comparing the prices charged to other AE's i.e. controlled transactions. The Tribunal further held that the transfer pricing adjustment of trans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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