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2014 (3) TMI 533 - ITAT DELHIAddition on account of transfer pricing adjustment Clubbing of transactions - Held that:- The assessee clubbed transactions of import of raw material, sub-assembles and components, payment of technical assistance fees, payment of royalty, payment of software and purchase of fixed assets under one segment of 'Manufacturing of the automotive components' and analyzed all such transactions on a combined basis - This type of combined benchmarking of all the international transactions is not in accordance with law - The mere fact that the overall profit earned by the assessee is more, would not ipso facto lead to the interference then all the international transactions are at ALP the decision in LG Electronics India Pvt. Ltd. Vs ACIT [2013 (6) TMI 217 - ITAT DELHI] followed thus, the approach adopted by the assessee in combining so many international transaction for determining ALP on a consolidated basis, is incorrect. Determination of ALP Projected operating profit margin considered - Held that:- The requirement under the relevant provisions of the Act along with the rules is to consider the `actual' figures and not any `projected' figures - It is beyond the comprehension as to how the projected figures can be substituted for the actuals when the requirement is to benchmark actual international transactions at ALP thus, the methodology adopted by the assessee cannot be accepted. Percentage of operating margin Held that:- Rule 10B(4) provides that the data to be used in analyzing the comparability of an uncontrolled transaction with an international transaction shall be the data relating to the financial year in which the international transaction has been entered into - Proviso of this rule for use of multiple year data is only an exception and not a rule, which can be invoked if the data for the current year does not result into the determination of correct prices - Nothing of the sort has been shown as to why the data of the comparables for the current year was not appropriate thus, the view of making comparability by the assessee cannot be accepted. Determination of ALP Held that:- Neither the assessee followed correct methodology for determination of ALP of this international transaction, nor the TPO/DRP applied the CUP method for determination of ALP in correct perspective thus, the order passed by the AO making addition proposed by the TPO, cannot be upheld thus, the order is set aside and the matter remitted back to the AO for freesh determination of ALP Decided in favour of Assessee.
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