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2012 (3) TMI 336 - AT - Income TaxAddition made by TPO rejected by CIT(A) - In respect of international transactions the assessee filed a report u/s 92E in Form no. 3CEB - The entire controversy in the present appeal revolves around the determination of ALP in respect of the Distribution segment - learned CIT(A) went by the assessee's declared Operating Profit (OP) margin at 1.63% ignoring the fact that TPO had rejected such OP rate and had instead determined operating loss at Rs. 14,86,852 - The contention is that since the assessee's OP rate of 1.63% falls within 1.405% to 10.795% (i.e. +-5%), it would require no addition - Since this standard price constitutes the basis for making addition in the hands of the asssessee on account of its international transactions with the associated enterprises, the legislature, in order to iron out the creases, inserted proviso to section 92C(2) - When we refer to plus minus 5% of the value determined under this method as per proviso to section 92C(2), it inevitably refers to the figure determined under this method, which is price and not profit embedded in the price - it is noticed that the assessee argued before the learned CIT(A) that plus minus 5% adjustment to 6.1% margin of the remaining 2 comparable cases would give the range of 1.405% to 10.795% - it is sine qua non to decide the correctness of the operating profit/loss earned/incurred by the assessee from the international transactions - it will be just and fair if the impugned order is set aside and the matter is restored to CIT(A) - Appeal is allowed for statistical purpose
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