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TMI Blog2024 (3) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... prices of third party brokerage houses / associations/ exchanges where ever available during the time of preparation of the TP documentation. Assessee has considered all the market quotations available while maintaining the transfer pricing report and considering the contemporaneous nature of documentation process as provided under the relevant provision of the Act. Thus if any third party rate is not considered for a particular date of contract due to non availability of the data would not give right to the TPO to reject the method adopted by the assessee. We find that the assessee has considered the rates based on the average of available third party market quotations of Murgi Meghan, Sunvin Group, Malaysian Palm Oil and Solvent Extractors and not specifically to any single broker rate. The objective of applying of any transfer pricing method is to determine the arm s length price for a given transaction and not to justify any transfer price at which the transaction may have been under taken - If there is a difference between arm s length price determined by a particular method and the transfer price adopted by the assessee, it may warrant the transfer pricing adjustment, in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by it in terms of section 92D of the Act read with Rule 10D of the Income-tax Rules, 1962 ("the Rules"); 3.2. rejecting the core functional analysis of the Appellant as a trader of edible oil commodities which warrants/corroborates the use of quotations from brokerage firms/ associations/exchanges for close comparability; 3.3. erroneously rejecting Other Method for benchmarking the Appellant's international transaction pertaining to purchase of traded goods in absence of sufficient 'The Solvent Extractors' Association of India ("SEA") data"; 3.4. not considering the tolerance range of 1% applicable in this case, as provided under the Act and the Rules; 3.5. selecting TNMM as the most appropriate method for the Appellant's international transaction pertaining to purchase of traded goods and, thereby rejecting/contradicting own methodology for suggesting an adjustment of INR 97,36,699 (representing merely 0.13% of the total value of international transaction pertaining to purchase of traded goods) using the Other Method; 4. That on the facts and circumstances of the case and in law, the Ld. AO/Ld. TPO have erred in selecting TN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analysis of international transactions during the year can be understood from the following chart :- Name of Transaction Name of AE Amount (INR) Method Purchase of traded goods Golden Agri International Pte Ltd. Integrated Advance IT Services Sdn Bhd 729,42,85,461 Other Method Corroborative Approach: Transactional Net Margin Method ("TNMM") Service fee 1,71,75,076 TNMM Remittances for OTC transactions 3,51,89,100 Other Method Corroborative Approach : TNMM Trade Receivables 2,24,66,448 Other Method Trade payables 102,29,65,945 Other Method IT related services 2,18,24,913 TNMM Payables 1,25,81,158 Other Method 7. The assessee in its TPSR has mentioned that it is engaged in trading of the finished goods. It purchases goods from its AE primarily based on the quotes from third party brokers such as Murji Meghan Services Private Limited, Sunvin Group, Malaysian Palm Oil Board (MPOB) and Solvent Extractors Association (SEA). 8. Based on the quotation from various brokerage houses / associations/exchanges, the average purchase price paid by assessee for purchase of traded goods was USD 744.99 per metrix ton as compared the average third party market quotation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules (1) (2) and (2A)] should, as far as possible, be contemporaneous and should exist latest by the specified date referred to in clause (iv) of section 92F: 13. Since the market quotes were available on corresponding dates and when corresponding dates data was not available on the date of contract entered between the assessee and its AE, therefore, in our considered view the "other method" has been rightly applied by the assessee. 14. We have given a thoughtful consideration to the orders of the TPO we are of the considered view that the TPO has failed to analyze the TP documentation prepared by the assessee. We find that the assessee has appropriately compared the prices of third party brokerage houses / associations/ exchanges where ever available during the time of preparation of the TP documentation. 15. We find that the assessee has considered all the market quotations available while maintaining the transfer pricing report and considering the contemporaneous nature of documentation process as provided under the relevant provision of the Act. 16. In our considered opinion if any third party rate is not considered for a particular date of contract due to non availability ..... X X X X Extracts X X X X X X X X Extracts X X X X
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