Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2010 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (5) TMI 845 - ITAT MUMBAITP Adjustment - Selection of CPM or TNMM as MAM - HELD THAT:- the assessee is manufacturing Optical Brightening Agents (OBAs) which are being used in textile and paper industries and which are exported by the assessee to the AEs as well as Non-AEs. the cost data for the manufacture of products are available as per cost audit report, the reliability there of is assured and therefore Cost Plus Method is the most appropriate method. In this view of the matter and in view of the detailed discussion by the learned CIT(A), we hold that the Cost Plus Method (CPM) is the most suitable method for the international transactions with AEs in the instant case. Since the exports to AEs at ₹ 34,32,62,520 is almost six times of the exports to Non-AEs which is at ₹ 5,58,47,305, therefore, an adjustment on account of volume discount should be allowed to the assessee in order to carry out a prudent transfer pricing analysis. We find from the orders of the TPO that similar volume discounts were allowed by him for the A.Ys. 2003-04 and 2004-05. Since the methodology for computation of volume discount for the A.Y. 2002-03 is the same as that was adopted for the A.Y. 2003-04 and which has already been verified by the TPO and accepted by the CIT(A), therefore, in our opinion, volume discount should be allowed to the assessee for the A.Y. 2002-03 on the basis of methodology accepted by the TPO and the CIT(A) in the subsequent year. With these observations, we restore this issue to the file of the AO for calculating the necessary volume discount and give appropriate relief to the assessee on the basis of the methodology adopted by him in the sub sequent years. The grounds raised by the assessee are partly allowed. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
|