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| The Tax Publishers2020 TaxPub(DT) 3195 (Del-Trib) INCOME TAX ACT, 1961
Section 92C Section 40(a)(ia)
Where assessee was manufacturer of lubricants and it purchased base oil to be used as raw material from its AE, and in respect of purchase of raw material from AE, TPO made certain addition to assessee's ALP by applying TNMM, in view of fact that assessee did not give full data in support of its contention that ALP was to be determined on basis of CUP method, matter was remanded back for disposal afresh.
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Transfer pricing - Computation of ALP - Assessee adopted CUP method while TPO relying upon TNMM made addition to assessee's ALP -
Assessee was manufacturer of lubricants and it purchased base oil to be used as raw material from its AE. In order to benchmark its international transactions, assessee adopted CUP method. TPO rejected functional and economic analysis conducted by the assessee and selected TNMM as the most appropriate method for determination of ALP. Held: CIT(A) did not give any categorical finding that TNMM was not applicable. CIT(A) simply mentioned that he agreed with the submissions made by assessee appellant wherein it highlighted various business and commercial reasons for non-applicability of TNMM method. Further, assessee did not give full data for applicability of CUP as the most appropriate method. Further, various comparables selected by TPO were not at all considered by CIT(A). If RPM was approved, then, TPO should be given opportunity for analysis of cost base of comparables, segmental details and benchmarking process. Considering fact that these were the initial years of transfer pricing proceedings, it was deemed proper to restore issue to file of AO/TPO for deciding issue afresh.
REFERRED :
FAVOUR : Matter remanded
A.Y. : 2004-05
INCOME TAX ACT, 1961
Section 195 read with Section 40(a)
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