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TMI Blog2024 (12) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... ). We are not able to comment as to whether the addition deleted by the ld. CIT(A) is correct. Further we find force in the argument of the ld. CIT-DR that the assessee has not executed any work for other party nor has awarded any sub- contract to any independent entity, so there no internal comparable available with the assessee for working the ALP under the CUP method. Admittedly, in the instant case, since the appellant-assessee itself has admitted that it is not providing services to any party other than MCL nor any work was got executed except from its AEs, the comparable uncontrolled transactions cannot be identified. Thus, how the working was done under CUP method is not explained at any stage. In the case of Calance Software Pvt. Ltd [ 2017 (6) TMI 129 - ITAT DELHI] as relied upon by assessee and ld. CIT(A), it is seen that though it is a case where back to back contracts was given to the associate enterprises, which is similar to instant case of assessee, however, the ALP was computed by following the CUP method by assessee itself whereas in the present case, the assessee has initially worked out the ALP on the basis of any other method specifically as provided under the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d non-deposit of PPF in due date respectively, in violation of provisions of Rule-46A of Income Tax Rules, 1962. 4. The appellant craves to alter, amend or add any other ground that may be considered necessary in course of the appeal proceeding. 3. The assessee against the above appeal of the revenue, has filed cross objection on the following grounds :- 1. That the order passed by the Transfer Pricing Officer (TPO) and the Assessing Officer (AO) and the additions made therein are illegal, bad in law and without jurisdiction. 2. That on the facts and circumstances of the case, the AO/TPO and Commissioner of Income Tax (Appeals) (CIT(A)) erred in not appreciating that the Assessee is not a taxable entity and as such is not an AOP. 3. That the AO/TPO/CIT(A) erred in not appreciating that this is a tax neutral exercise. 4. That the Assessee seeks permission to raise additional grounds at the time of hearing. 4. Brief facts of the case are that the assessee is an AOP and was formed as Joint Venture between M/s NCC Limited (NCC), M/s Sainik Mining and Allied Services Limited (SMASL) and M/s Jalram Transport (JRT) to execute the mining works like, OB Removal, loading, transportation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he right person. That, the mere fact of the income sought to be taxed as per this assessment proceeding has been taxed earlier in the wrong hands does not preclude the Department to tax the right person in respect to that income. Reliance is placed on the decision of the Hon'ble Supreme Court in ITO v Ch Atchaiah 218 ITR 23 9 where it was held that the Assessing Officer can, and he must tax the right person and the right person alone. By right person '; we mean the person who is liable to be taxed, according to law, with respect to a particular income. The expression wrong person is obviously used as the opposite of the expression right person 'Merely because a wrong person is taxed with respect to a particular income, the Assessing Officer is not precluded from taxing the right person with respect to that income. This is so irrespective of the fact which course is more beneficial to the Revenue. In our opinion, the language of the relevant provisions of the present Act is quite clear and unambiguous. Section 183 shows that where Parliament intended to provide an option, it provided so expressly. Mere a person is taxed wrongfully, he is no doubt entitled to be relieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in effect, rendered by associate enterprises to independent parties, the price charged for the same service by associate enterprises from independent end customer was best CUP input for determining arms length pricing. Besides two additions made by the AO were also deleted by the ld. CIT(A) which has been challenged by the department on the ground that the ld. CIT(A) has accepted the additional evidences without following the procedure laid down under Rule 46 of I.T Rules, 1962. 6. Before us, ld. CIT-DR vehemently supported the order of the AO and submitted that in the Form 3CEB, the assessee in point No.22 has categorically stated that it had used such other method as may be prescribed by the Board for determination of ALP u/s. 92C(i) of the Act, however, neither any details nor any other particulars were filed in regard to the computation of such price. He submitted that it is an undisputed fact that the assessee did not own any asset nor has executed the work awarded to it by MCL and it was its three joint ventures partners who had carried out the entire work as sub-contractors for the assessee JV. The TPO applied TNMM method which is based on the comparison of independent parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k-up ill.) The Id. CIT(Appeals) has held that in case of back to back contracts, the CUP is the best method relying on the decision of Hon'ble Delhi Tribunal in the case of Calance Software Pvt. Ltd. (B2 taxmann.com 390). However in the cited case, the said company had followed CUP method which is not the case here. Therefore it is a substituted view of Id. CIT (Appeals) which is divorced from the reality. iv.) The Id. CIT (Appeals) has not given any finding to show/demonstrate that how the profile of the assessee is different from that of the comparables chosen by the TPO. Thus the order of CIT(Appeals) is cryptic in this regard. v.) It was held by the Hon'ble Delhi ITAT in the case of DCIT vs. Aithent Technologies (P.) Ltd. (53 taxmann.com 29B) that where no reasoning was given by Commissioner (Appeals) for accepting assessee's claim, it was a non- speaking cryptic order and therefore the matter required re-adjudication. In the absence of any discussion addressing the reason, the finding was open to challenge on the grounds of being arbitrary. In view of that matter, the issue was restored to the file of CIT(Appeals) for re- adjudication. vi.) As regards the differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act. This is supported by the following judgements: a) Hon'ble Madras HC in the case of Unific Management Securities (India) (P.) Ltd. vs. DCIT (lOO taxmann.com 244) b) Hon'ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation (41 taxmann.com 100) c) Hon'ble Kerala HC in the case of CIT vs. Merchem Ltd. (61 taxmann.com 119) d) Hon'ble Gujarat HC in the case of Pr. CIT vs. Suzlon Ltd. (l15 taxmann.com 340) e) Hon'ble Delhi HC in the case of CIT vs. Bharat Hotels Ltd. (410 ITR 417) f) Hon'ble Kerala HC in the case of Popular Vehicles Services vs. CIT (96 taxmann.com 13) 8 9. With regard to the other two issues, the ld. CIT-DR submitted that the ld. CIT(A) has deleted the addition by accepting the details which was not filed before the AO nor they have been sent to AO for his remand report which is a clear violation of Rule 46A of IT Rules, 1962, where additional evidence have been admitted by the ld. CIT(A) without providing an opportunity to the AO for making his comment on such evidences. He, therefore, prayed for confirmation of the adjustments/addition made by the AO. 10. On the other hand, ld. AR of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son as per section 2(31) of the Income Tax Act, 1961, then charging section i.e. S. 4 of the Act shall not be applicable. Hence it will not be open for revenue to charge tax from the entity (i.e. which is not a person as Income Tax Act). 12. It is further submitted that explanation to section 2(31) of the Act shall not be applicable in the present case because applicability of explanation to section 2(31) of the Act presupposes that AOP/BOI has been formed or established or incorporated , Whereas in the instant case the, inter-alia, issue before your good self is that whether the assessee can be treated as AOP for the purpose of section 2(31) of the Act. 13. It is further submitted that in the instant case the ratio of decision of Supreme Court In the matter of ITO v. ChAtchaiah 218 ITR 239 shall not be applicable because in lTO v. ChAtchaiah 218 ITR 239 the apex court did not decide the question that Whether assessee can be regarded as Association of Person or notr 'Whereas in ITO v. ChAtchaiah 218 ITR 239 it was not disputed that the assessee (in ITO v. ChAtchaiah 218 ITR 239) was an AOP. But in the instant case the, inter-alia, issue before your good self is that whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative convenience 1~ That the JV did not execute any work except that it had sub- contracted the whole work on back-to-back basis to its constituents. In such a situation, no income had accrued or had arisen in the hands of the assessee. The aforesaid outsourcing of contract was tax neutral because JV being an association of person having maximum tax rate and the JV parties being companies and firm also taxed at the same rate which is evident from the Income Tax Return, Balance Sheet and Tax Audit Report of JV partners are attached herewith. Further the share of JV partners in the profits of JV are be exempt in the hands of its constituent partners in terms of clause (a) of first proviso of Section 86 and Section 110 of the Income Tax Act, 1961. Therefore there was no loss to the revenue in this transaction. The aforesaid argument is having authority from M/s. Limak Soma Joint Venture V. Department of Income Tax wherein Hon'ble ITAT-Hyderabad bench observed inter-alia in para-s of their judgment, which is reproduced herein below for your ready reference, that: We find force in the argument of the learned counsel for the assessee that it could not be a case of tax evasion as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1961 (for short the Act) was issued and served on the assessee; later a notice under Section 142(1) of the Act was issued along with a questionnaire; in response thereto, the authorized representative of the assessee appeared and furnished the information; the assessee-JV was awarded contracts by the Irrigation Department of the Government of Andhra Pradesh; later these contracts were given by the assessee on sub-contract, to one of its constituents, on a back to back basis without any margin; during the assessment year under consideration, the assessee had declared gross receipts of Rs. 1,07,55,16,904/-, and the same was passed on to the sub-contractor; and, in view of the above, the income of Rs. NiI, as returned by the assessee, was accepted. 20. It is further submitted that the judgments relied by the assessee although relates to Section 40A(2) of the Income Tax Act, 1961 but these judgments are equally applicable in the present case because section 40A(2) and provisions of chapter X of the Income Tax Act, 1961 have common jurisprudence (i.e. To avoid Income Tax evasion from related party transactions), therefore principles emanating from section 40A(2) are equally app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er words from the NIT-639 it can be said the main business activity carried out by JV partners on behalf of JV was Loading and Transportation of Coal. Further the activity of Loading and Transportation of Coal can be labeled mining activity or ancillary to the mining activity. It is further submitted that the JV was never engaged into the business of mining of Iron Ore or pulverizing processing of oil or business of sale of boulders or aggregators etc. Assets 3. The work awarded by Mel was outsourced to the JV partners at the same rate at which it was awarded by the MCL to the JV because the main purpose behind the formation of JV was not to earn profits but to bring coordination among the JV partners to execute the works given by MCL. Therefore, the JV did not own any assets. All the assets used in discharging of aforesaid NIT-639 were owned by the respective JV partners. Accounting/Billing 4. The JV has been since acting as a facilitator had to account for the entire gross receipts received by it from the Principal Employer in its books while transferring the same to the account of the Sub-Contractors as the same is only a debt due to them for the project work already executed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 92BA. During the assessment proceedings, reference u/s 92CA was made by the ld. AO to the jurisdictional Transfer Pricing Officer (TPO). The Ld. TPO after calling various information and documents determined the Arm length Adjustment of Rs. 3,05,45,593/- through Transaction Net Margin Method (TNMM). A copy of the TPO's order dated 28.10.2016 passed u/s 92CA(3) of the Income Tax Act, 1961 is annexed as Annexure-2. 8. With regard to above Arm Length Price Adjustment it is submitted that the aforesaid Arm Length Price Adjustment was bad and devoid of merits because for determination of aforesaid Arm Length Price Adjustment the Ld, TPO followed the TNM Method and whereas the JV followed the any other method as mentioned in Section 92C (l)(f) of the Act. A copy of the transfer pricing study which shows that the JV that the any other method is annexed as Annexure-3. It is further submitted that section 92C(1) of the Income Tax Act, 1961 provides five method for computation of Arm Length Price and the details of aforesaid five methods are mentioned in Rule-10B of the Income Tax Rules, 1962. Further, the tone and tenor of Section 92F, 92C and Rule-10B suggests that the realm of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been charged for products and services, as nearly as possible, in case such SOT were not controlled by virtue of them being executed between related parties. The object of the exercise is, thus, to remove the effect of any influence on the prices or costs that may have been exerted on account of the SOT being entered into between related parties. It is, at once, clear that for the exercise of determining ALP to be reliable, it is necessary that the controlled transactions be compared with uncontrolled transactions which are similar in all material aspects. In light of aforesaid background behind the SOTs, it is submitted that the contract was awarded by the Mahanadi Coalfield limited (MCL), a subsidiary of Coal India limited. Further the contract was awarded through tender process and the prices of the contract were locked through Letter of Acceptance of NIT-639. Therefore the appellant JV has no say in case of prices determined by MCL, being MCL an independent government body and subsidiary of Coal India Limited which acts as regulator in the coal industry. Therefore MCL being an independent government body, the appellant JV has no control over the pricing policy determined by M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Coalfield Limited (MCL) on back to back basis the entire work to its constituents at price which determined by the Mahanadi Coalfield limited (MCL), therefore Comparable Uncontrolled Price Method (CUP) method would be the most appropriate method as the CUP Inputs are available. It is most humbly submitted that when perfect CUP inputs are available as in this case in respect of back to back transaction, CUP method Is the best and inherently most suitable method, as it is a direct method and It hardly leaves any scope for distortion of results by extraneous factors. Further for the aforesaid proposition of law reliance is placed on the recent judgment of Hon'ble ITAT Delhi Bench in the matter of Dy. CIT. Ahmedabad v. (lance Software Private Limited (20171 82 taxmann.com 390 IDelhi- Trib) wherein it was held: 3. The assessee is engaged, inter alia, engaged in providing services such as software development. During the relevant previous year, the assessee rendered software development services to its associated enterprises. There were three different transactions, values of which aggregated to Rs 3,01,19,496, and all these transactions were with Calance Corporation, United States ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets employed or to be employed and the risks assumed, by the respective parties to the transactions: (c) the contractual terms (whether or not such terms are formal or in writing) of the transactions which lay down explicitly or implicitly how the responsibilities, risks and benefits are to be divided between the respective parties to the transactions; (d) conditions prevailing in the markets in which the respective parties to the transactions operate, including the geographical location and size of the markets, the laws and Government orders in force, costs of labour and capital in the markets, overall economic development and level of competition and whether the markets are wholesale or retail. Thus from the above it is evident that in order for the benchmarking studies to be reliable for the purposes of determining the ALP, it would be essential that the entitles selected as comparables are functionally similar and are subject to the similar business environment and risks as the tested party. Further for the aforesaid proposition of law reliance is placed on the judgment of Hon'ble ITAT Delhi Bench in the matter of Rampgreen Solutions Private Umited v. (IT [2015] 60 taxm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xure- 4. Whereas the Appellant JV is engaged in loading transportation of coal, therefore the business activity of this comparable-l is different from the business activity of Appellant JV In this connection it is submitted that if the functional profile of the comparable-1 is different from appellant N, then the comparable is liable to be excluded. The Hon'ble ITAT Delhi Bench in the matter of McKinsey Knowledge Centre India (P.) Ltd. v. Dy. CIT, Circle 16(2), Delhi (2017) 82 taxmann.com 25 (Delhi-Trib) held as under: ......... According to us, though comparable is not engaged in business of raising of funds and deploying same, but it is engaged in advising functions of raising of funds and deploying same. Based on work profile of assessee and details of services provided as stated in Para No. 17 above. it cannot be stated that functions performed by assessee in research and information services are anywhere similar to functions of a fund manager. In view of decision of coordinate bench in assessee's own case for assessment year 2011 - 12 and also on basis of our analysis of functions of assessee vis - a -vis comparable, we direct ld. Transfer Pricing Officer/AD to exclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1 to Rs. 200 Crores is having this lacunae and therefore, the same is rightly held to be not a proper filter but nowadays the Tribunal is applying different turnover filter i.e. if the turnover of a comparable is less than 1/10th of the turnover of the tested party or is more than 10 times of the turnover of the tested party, 'than it is not a good comparable. In our considered opinion, this modified turnover has removed the vital lacunae of the earlier turnover filter from 1 to 200 Crores considered, in those cases and therefore, in our considered opinion, these Tribunal orders as per which it was held that the earlier turnover filter of Rs. 1 to 200 Crores is not a proper filter are not application in the present case. We are proceeding to apply the turnover filter of less than Ijl0th of the assessee company's turnover or more than 10 times of the turnover of the assessee company. Regarding this observation of the Tribunal that the turnover cannot be relevant criteria in a service sector, we would like to observe that as per the recent amendment in IT Act, as per which 'Rule of safe Harbour' is introduced, it is admitted by revenue also that the provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risk etc, whereas the Appellant JV outsourced the contract on back to back basis to JV partners. Therefore the Appellant JV assumes very minimum risk, hence the risk profile of the comparable-l is totally different from the JV company, further the comparable company assumed greater risk and have all the potentiaIs and means to mitigate the risks taken by the comparable company due to diversification in the business operations, owned funds employed in the company which are closed to Rs. 655. 83 crores, asset block of Rs. 486 crores and other income of Rs. 83.00 crores, which are not available to the Appellant JV. In this connection the Hon'ble ITAT Banglore Bench 'B' in the matter of DV. CIT. Clrcle-ll, Bengaluru v. AOl Online India (PI limited [2017] 84 taxmann.com 70 (Bangalore- Tribl held as under: 17. From the above, we find that Infosys Ltd, is a giant company In the area of software and it assumed all risks leading to higher profits, whereas the assessee company was a captive unit of the parent company and assumed only a limited risk. In the present case also, the assessee company is providing services to the parent company and therefore, assuming only limited risk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omparable is liable to be excluded. For the aforesaid proposition, the decision of Hon'ble ITAT, Delhi Bench as mentioned in para-12(i) (supra)is also relied here, however the same is not reproduced for the sake of brevity. vii. The turnover of comparable-2 from the is Rs. 421.68 crores, therefore the turnover of comparable-z is more than 16.81 times of the turnover of the Appellant JV. In this connection all the contents, averments and decision mentioned in para-12(ii)(supra) are also relied here, however the same are not repeated for the sake of brevity. viii. The trend of the turnover of the comparable company for 5 years was as under:- From the above it is evident that the market size for the comparable company is infinite as shown by the trend in the aforesaid table, therefore the revenue and profits of the company were in growing stage, whereas the market size of the appellant JV is restricted to the work contract awarded by MCL, which is limited to 1095 days. ix. The main turnover of the Comparabe-2 arises from exports of goods and during the relevant assessment year the Cornparabe-2 exported goods of Rs. 421.68 Crores. Therefore the Comparabe-2 sale its good and service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the decision of Hon'ble ITAT, Delhi Bench as mentioned in para-12fi} (supra}is also relied here, however the same is not reproduced for the sake of brevity. xi. The comparable-3 have fixed assets base of Rs. 636.17 crore, which include both Tangible Intangible Assets. Further the company has invested in R D activities and has applied to MOEF for increase in mining capacity by 25% which means the company has potential to grow with same fixed cost structure leading to higher turnover and profit. xii. During the relevant assessment years the company has recognized the revenue on sale of lignite on the basis of adhoc interim price orders of RE RC dated 02.04.2012 and 15.10.2012, wherein the adhoc interim transfer price inter-alia arrived by considering 65% or 75% of the transfer price claimed by the company in its petition. Based on these orders and in accordance with the views expressed by the Comptroller and Auditor General of India (CAG), the company has booked the lignite extraction charges payable to Mine Developer cum Operator (MOO) in the same proportion as approved in the adhoc interim tariff order. The company in the disclosures of accounting policies, change in accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. DelT. Circle(1)(2) [2017] 84 taxmann.com 153 (Banglore-Trib) wherein it was held: {lll. We have considered the rival submissions. Regarding the request of the assessee for exclusion of 6 comparables, we find that in the case of Lakshmi Precision Tools Ltd., the RPT percentage is 74.41% and therefore, this company is not a uncontrolled comparable and hence. we direct the AO/TPO to exclude this company from the list of final comparable. [Para-Ll] Furthermore, as the comparable company has, undertaken RPT closed to 100%, therefore this comparable company does not full fill the filter chosen by the Ld. TPO. xlil, Therefore from the above it can be said that the comparable-3 is functionally different, have high turnover, prepared financials on adhoc interim transfer price determined by RERC and have RPT more than 25% therefore did not fulfill the filter criteria used by the Ld. TPO. Hence, the purpose of Transfer Pricing study the comparable-4 does not deserve to be considered as benchmark and liable to be deleted from the list of comparables and should not be consider while calculating the Profit Level Indicator (PLI) as per TNM method. HI-TECH ROCK PRODUCTS AGGREGATES LIMITED ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. DCIT. Circlel(1}(2) [2017] 84 taxmann.com 153 (Banglore-Trib) wherein it was held: 11. We have considered the rival submissions. Regarding the request of the assessee for exclusion of 6 comparables, we find that in the case of lakshmi Precision Tools Ltd., the RPT percentage is 74.41% and therefore, this company Is not a uncontrolled comparable and hence, we direct the AO/TPO to exclude this company from the list of final compatable. [Para-11] Furthermore, as the comparable-4 does not full fill the criteria/filter chosen by the ld. TPO, therefore Comparable-4 should be excluded on this sole ground alone. xvii. Therefore from the above it can be said that the comparable-4 is functionally different, have high turnover and have RPT more than 25% therefore did not fulfiil the filter criteria used by the ld. TPO. Hence, the purpose of Transfer Pricing study the comparable company does not fit in compare to the appellant JV. Hence, it is requested that this company should be deleted from the list of comparables and should not be consider while calculating the Profit level Indicator {PLI) as per TNM method. OREN MUD CHEMICALS PULVERISING PRIVATE LIMITED (I.e. 5th Comparable Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the total turnover of Rs. 7.50 crores to M/s Oren Hydrocarbons Private Limited. Since the comparable company has undertaken RPT closed to 98.5%. Since the comparable-5 has undertaken RPT closed to 98.5%, therefore comparable-5 cannot be regarded as an independent enterprise. In this connection reliance is placed on decision of Hon'ble ITAT Bangalore Bench 'c' in tile matter of Biesse Manufacturing Company {P.} Ltd. v. DCIT, Circle 1(1)(2) [2017] 84 taxmann.com 153 (Banglore-Trib) wherein it was held; 11. We have considered the rival submissions. Regarding the request of the assessee for exclusion of 6 comparables, we find that in the case of lakshmi Precision Tools ltd the RPT percentage is 14.41% and therefore. this company Is not a uncontrolled comparable and hence. we direct the AO/TPO to exclude this company from the list of final comparable/' [Para-ll] Furthermore, as the comparable-S does not full fill the criteria/filter chosen by the ld. TPO, therefore Comparable-5 should be excluded on this sole ground alone. xxi. Therefore from the above it can be said that the comparable-5 is functionally different! have RPT more than 25% and profit loss account of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyer. 4.2 The work shall be executed by the Parties as an integrated Joint Venture. 13. The Joint Venture-assessee was awarded contract of transportation from MCL and during the year under appeal total amount of Rs. 25,97,41,438/- was received against the execution of the work. The entire work was executed by three joint ventures constituents on behalf of the assessee-joint venture on sub-contract basis and the amount received by each constituent against the work executed by it, is tabulated as under:- Name of party Amount in Rs. %of share in Revenue NCC 4,65,74,163/- 17.93 SMASL 13,46,23,119/- 51.83 JRT 7,85,44,157/- 30.24 Total 25,97,41,439/- 100 14. Here it is relevant to state that from the perusal of the same it can be noted that the work executed is not in equal ratio by all the constituents and it is also contrary to Article 4.2 of the Joint Venture agreement which clearly provide that work shall be executed by the parties as Integrated Joint Ventures. 15. Since this transaction is covered under the specified domestic transaction, therefore, the AO has made a reference u/s. 92CA of the Act to the TPO for determination of the ALP. The TPO vide order passed u/s. 92CA(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to execute the work. The comparables used by TPO do not match with the profile of the appellant. In the decision of Calance Software Pvt. Ltd (Supra), Hon'ble Tribunal has held that so far as back to back transactions were concerned, since services rendered by assessee to associate enterprises were exactly same as, in effect, rendered by associate enterprises to independent parties, the price charged for the same service by associate enterprises from independent end customer was best CUP input for determining arms length pricing. Considering the above, the addition made by the assessing officer of Rs 3,05,45,593/- is directed to be deleted. The grounds of appeal are allowed . 16. From the perusal of the observation of ld. CIT(A), we find that the ld. CIT(A) has based his findings of the judgment of the coordinate Delhi Bench of the Tribunal in the case of DCIT Vs. Calance Software Pvt. Ltd., reported in (2017) 82 taxmann.com 390 (Delhi) and held that CUP method is the most suitable method under the given circumstances of the case. However, from the perusal of the submission of the assessee as reproduced above, as well as from the order of the ld. CIT(A), we find that detailed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d except from its AEs, the comparable uncontrolled transactions cannot be identified. Thus, how the working was done under CUP method is not explained at any stage. 19. In the case of Calance Software Pvt. Ltd. (supra), as relied upon by assessee and ld. CIT(A), it is seen that though it is a case where back to back contracts was given to the associate enterprises, which is similar to instant case of assessee, however, the ALP was computed by following the CUP method by assessee itself whereas in the present case, the assessee has initially worked out the ALP on the basis of any other method specifically as provided under the Section 92C(i) of the Act , which was not accepted and allegedly TNMM method was adopted by TPO and thereafter the assessee has changed its stand in the appellate proceedings and admitted the CUP method as the most appropriate method. But at no stage any precise working was provided for any of the two methods adopted by the assessee. Under these circumstances, we are left with no other alternative but to send back the matter to the file of AO to re-examine the issue and refer the matter back to the TPO for determination of ALP based on the best suitable method ..... 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