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2012 (4) TMI 359 - AT - Income TaxGrievance of the assessee relates to the adjustment of ₹ 1,76,56,164 to the ALP of the international transactions between the assessee and its Associated Enterprises (AEs). The TPO passed an order u/s. 92CA of the Act on 28.10.2009 proposing adjustments of ₹ 2,29,86,949 - The ld. counsel for the assessee submitted that the assessee purchased raw material for ₹ 21.09 crores and adopted TNMM method - It was submitted that as per proviso to section 92C(2) of the Act, an option was available to the assessee for adjustment of +/- 5% variation for the purposes of computing ALP - In the present case, the assessee has not disputed the adjustments u/s. 92CA of the Act, but challenging the working of ALP without giving benefit of the option available under the erstwhile proviso to section 92C(2) of the Act, so it becomes relevant to discuss the provisions contained in the erstwhile proviso to section 92C(2) of the Act, which was inserted by Finance Act, 2002 w.e.f. 1-4-2002 - It is clear that the option is available to the assessee for adjustment of +/- 5% variation for the purposes of computing ALP. - In the present case, it appears that the benefit of +/- 5% adjustment has not been given to the assessee for the reason (as mentioned by the TPO) that sales made by the assessee to third parties were higher in comparison to the rates of sale by AEs to the assessee - Held that: the benefit of +/- 5% intended by the erstwhile proviso to section 92C(2) of the Act was not available to the assessee. Regarding the applicability of the amended provisions in proviso to section 92C(2) - the withdrawal of the interpretation placed in circular No 5 /2010 (supra) on the applicability of the amended proviso is sought to be done away by the Corrigendum dated 30.9.2010 and, therefore, such withdrawal shall be effective only after 30.9.2010, even if such Corrigendum is accepted as valid - Held that: the circulars which are in force during the relevant period are to be applied and the subsequent circulars either withdrawing or modifying the earlier circulars have no application. Held that: no justification in the action of the lower authorities in disentitling the assessee from its claim for the benefit of +/-5% to compute ALP in terms of the erstwhile proviso to section 92C(2) of the Act – Appeal is partly allowed
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