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2015 (11) TMI 1790 - ITAT PUNETP Adjustment - international transactions entered into by the assessee with its associated enterprises in respect of export of finished goods and import of goods - MAM selection - TNMM method or CUP method - HELD THAT:- As relying on assessee's own case [2015 (7) TMI 1 - ITAT PUNE] we find no merit in the orders of authorities below in determining the arm's length price in respect of international transactions undertaken by the assessee for the year under consideration. Transactions of exports, imports and payment of commission to agents are closely inter related and are part of single business activity of the assessee and the profit earned by the assessee is collective result of all these transactions and hence, it is impractical to analyse the profits of each individual transactions. Accordingly, the assessee has rightly aggregated the above transactions for the purposes of determining the ALP under TNMM. Even if the various transactions are evaluated independently, the net final result remains the same. The assessee has adopted TNMM for determining the ALP for the various transactions and the assessee had contended that its net operating margin is much higher than the comparable companies. This fact has not been disputed by the learned TPO since he himself has accepted that more than 95% of the exports and imports are at ALP as per the TNMM method. Accordingly, even if the various international transactions are evaluated separately, the final result remains the same. The assessee has adopted TNMM wherein the net operating margin of the assessee is compared with the net operating margin of the comparables. Once the net margin of the assessee is higher, it means that all the international transactions entered into by the assessee with its AEs are at ALP. CUP method is not the most appropriate method in the case of the assessee since suitable adjustments are not possible to be made in respect of the above differences. So, the addition on this account is not justified. No adjustment is to be made for determining the arm's length price in respect of international transactions undertaken by the assessee for the year under consideration. We direct the Assessing Officer to delete the said adjustment made in the hands of assessee on account of arm's length price of international transactions entered into by the assessee with its associate enterprises. Accordingly, we allow the ground of appeal Nos.4, 5, 6 and 7 raised by the assessee. The alternate plea raised vide ground of appeal Nos.8 and 9 are dismissed. In view of no addition being made in the hands of assessee, there is no merit in the ground of appeal No.10 raised by the assessee for granting the benefit of 5% as per proviso to section 92C(2) of the Act.
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