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2014 (1) TMI 1801 - ITAT HYDERABADTPA - ALP determination - selection of TNMM as the most appropriate method as against CPM adopted by the assessee - Held that:- Therefore considering the fact that the assessee itself in the TP study has offered TNMM as an alternative method for computing the ALP, it should not have any grievance if the TPO adopts TNMM as the most appropriate method for determining the ALP. The decisions relied upon by the assessee in this regard will not apply to the facts of the present case as the assessee itself in the TP study has offered TNMM as an alternative method. We are therefore not inclined to entertain the grounds raised by the assessee on this issue. Selection/rejection of certain comparables - Held that:- The assessee is engaged in contract programming which otherwise is known as ‘body shopping’, thus companies functionally dissimilar with that of assessee need to be dropped from final list of comparable. Whether there is no requirement for transfer pricing adjustment as the assessee is claiming exemption u/s 10B - Held that:- As decided in DCIT V/s. Hellosoft India Pvt. Ltd. [2013 (10) TMI 747 - ITAT HYDERABAD] Arms length price is nothing but a fair price which would have been normal price. There is always a possibility of transaction between a nonresident and its associates being under valued and having regard to such tendency, a provision that income arising out of the said transaction could be computed having regard to arms length price, will not be opened to question and is within the legislative competence to effectuate the charge of taxing real income in India. Once the benefit is exhausted, the assessee would be liable for taxation in which case, the German tax rate may be more attractive. If the pricing for the exempted years is accepted without analysis there is every chance that the assessing authority might be estopped, on the doctrine of consistency, from examining the pricing for the subsequent non-exempted years. This is quite uncalled for. See M/s SAP Labs India Pvt. Limited V/s. ACIT [2010 (8) TMI 676 - ITAT, BANGALORE] - Decided against assessee. Calculation of ALP on the total turnover which includes non AE turnover - Held that:- Transfer pricing provision apply to the determination of ALP in respect of controlled transactions between related parties. Therefore, un-controlled transactions with third parties who have no relationship with the assessee cannot be considered for transfer pricing adjustment. We therefore direct the Assessing Officer /TPO to verify this aspect and exclude the turnover relating to non AE for determining ALP. Exclusion of VISA processing charges and relocation charges from export turnover without deducting the same from the total turnover while computing deduction u/s 10B - Held that:- We direct the Assessing Officer to exclude VISA charges and relocation charges from the export turnover as well as total turnover while computing deduction u/s 10B of the Act.
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