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2014 (2) TMI 682 - AT - Income TaxTransfer pricing adjustment - Selection of comparables – Held that:- The data available in the public domain leading to the conclusion that ICC International Agencies was operating in unique circumstances during the period under consideration prima facie requires be considered and verified - it cannot be outrightly rejected taking a specious plea that the comparable was proposed by the assessee itself - the data for two years prior to the year in which transaction took place can be considered if it is revealed that these facts could have an influence on the determination of transfer prices in relation to the transactions being compared - sub-Rule (3)(i) requires a certain degree of comparability vis-à-vis the differences remaining and clause (d) of sub-Rule (2) of Rule 10B amongst others mandate that conditions prevailing in the market include amongst others criteria a consideration of laws and Government orders is force at the relevant point of time. The assessee cannot be barred from pleading for the exclusion of a comparable when it pleads the existence of extra-ordinary circumstances - The existence of such a fact would make a specific period creating extraordinary circumstances in the case of a functional comparable an incomparable - only like can be compared with like and once the existence of unique circumstances is raised by a party even if the comparable was proposed by the said party itself if the party based on information subsequently available in the public domain, is able to show the existence of unique circumstances – thus, there is nothing in law which bars the assessee to move the authorities or the Appellate Forums to look into and seek an adjudication on the issue. A comparable can be taken as a comparable purely and simply only for the reason that it is a comparable and alternately it most definitely cannot be "declared" to be a comparable only on the ground that it has been offered as a comparable by a party to the proceedings ignoring the arguments that it was offered on a mistaken belief of law and facts – there was no statutory or legal impediment in the stand of the assessee as to why the said comparable should not be excluded and also do not see any reason as to why the assessee be saddled with the said comparable – thus, the matter remitted back to the TPO for excluding the comparable after allowing the assessee to lay evidence in support of its claim. Power of making further enquiry u/s 144C of the Act – Refusal to consider the additional evidences - Identification of New comparables - Held that:- The assessee is not barred even at the Appellate stage before the CIT(A) to seek permission to produce additional evidence which the Rules mandate can be admitted on the fulfillment of the conditions set out in clauses (a) to (d) in sub-rule (1) of Rule 46A - The First Appellate Authority while admitting additional evidence is required to pass an order in writing recording the reasons for admitting the evidence as per sub-rule (2) of Rule 46A and thereafter by sub-rule (3) is required to confront the same to the AO - The reason for inclusion of the four additional comparables has been stated to be that the names of the four comparable coming up on applying the changed search criteria of the TPO to the updated data available in the public domain - the procedure has implicitly been followed as the Remand Report has been obtained - The mere argument that a comparable has been accepted in some year is not sufficient by itself to warrant an inclusion of such comparable – thus, the assessee is directed to address the 4 comparables it seeks to be included backed by segmental data including specific facts and information to support its claim instead of merely reiterating for the inclusion of the 4 comparables stated to be thrown up applying the search criteria of the TPO – Decided partly in favour of Assessee.
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