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2015 (3) TMI 613 - HC - Income TaxCorrectness of the ITAT’s order - directing the AO/TPO for fresh determination of the addition originally made on account of Arm’s Length Price, which was specified in the course of the proceedings - Held that:- Question of law urged in both the appeals does not arise since it already stands settled in the previous order reported in [2014 (1) TMI 501 - DELHI HIGH COURT] - pertaining to the present assessee wherein held that there is no legal authority under the Income Tax Act, 1961 or the Rules to broaden the cost base in that manner. Consequently, the ITAT directed a remission of the matter to the AO for redetermination of the cost base. The TPO’s reasoning to enhance the assessee’s cost base by considering the cost of manufacture and export of finished goods, i.e., ready-made garments by the third party venders (which cost is certainly not the cost incurred by the assessee), is nowhere supported by the TNMM under Rule 10B(1)(e) of the Rules. Having determined that (TNMM) to be the most appropriate method, the only rules and norms prescribed in that regard could have been applied to determine whether the exercise indicated by the assessee yielded an ALP. The approach of the TPO and the tax authorities in essence imputes notional adjustment/income in the assessee’s hands on the basis of a fixed percentage of the free on board value of export made by unrelated party venders. Appeal dismissed.
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