TPO Must Redo ALP Adjustment Using Resale Price Method, Recognizing Both Manufacturing and Trading Segments

The ITAT remanded three issues to the AO/TPO for reconsideration. Regarding transfer pricing, the Tribunal held that the TPO misunderstood the assessee's business structure and incorrectly rejected the Resale Price Method (RPM) despite its prior acceptance by Revenue for the trading segment. The AO/TPO must redo the ALP adjustment using RPM, recognizing the assessee's dual manufacturing and trading segments. On the Section 37 disallowance of 10% of total expenditure, the AO must verify additional evidence submitted by the assessee. Concerning the Section 69C addition based solely on CBEC export-import data, the ITAT directed the AO to collect comprehensive information from the assessee regarding imports and reconcile with customs duty paid, rather than relying exclusively on CBEC data. .....

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