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2015 (5) TMI 302 - AT - Income TaxTransfer pricing adjustment - addition of ₹ 29,70,31,153/- made to the returned income on account of determination of the arm's length price of the international transactions entered into by the assessee with its associated enterprises - TPO reject the external CUP data based on the price quotes of MMSPL - In the present case, the international transactions in question relate to transaction of import of oils by the assessee from its associated enterprises - plea of the assessee has been that the tested transaction of import of oil from associated enterprises has also been undertaken with third parties - Held that:- Assessee has purchased Soyabean and sunflower oils from its associated enterprises as well as from third parties. Apart therefrom, it is also a peculiar fact in the present case that the product being transacted is a commodity which is recognized for trading in Commodities Exchanges. For instance, the Chicago Board of Trade (CBOT), which is an internationally recognized and accepted commodity exchange based in Chicago in USA facilitates trading in commodities, inter-alia, vegetable oils also. Therefore, the quotations appearing on such exchanges would reflect the prices at which the commodities are being traded in the market place. The price publication of Oil World, which was also pressed into service by the assessee, would be reflective of the prices prevailing in the market at a particular point of time. Undoubtedly, the rate quotations of CBOT and Oil World can be said to be a data published by independent organizations, which reflect the prevailing market rates. These prices have been adopted by the assessee as comparable uncontrolled transaction prices and the tested transactions have been benchmarked vis-à-vis such prices. The stand of the TPO in rejecting the aforesaid data as being mere quotations and not actual transactions, in our view, is not justified. It is evident that the Hon’ble High Court of Gujarat in Commissioner of Income Tax Versus Adani Wilmar Limited [2014 (4) TMI 563 - GUJARAT HIGH COURT ] held that the price publications are also relevant material for the purposes of carrying out the comparability analysis in the course of application of CUP method; so however, such price publications ought to be authentic and reliable. It is also noteworthy that the Hon’ble High Court of Gujarat was considering an objection of the Transfer Pricing Officer, which is similar to that being raised before us, which is to the effect that the price publication of Oil World only reflect quotations and not actual transactions. The said argument did not find favour with the Hon’ble High Court of Gujarat and it noted that the reliability and authenticity of the material stood established. Infact, the decision of the Pune Bench of the Tribunal in the case of ACIT Vs. MSS India (P) Ltd. (2009 (5) TMI 600 - ITAT PUNE-A ) relied upon by the Ld.CIT-DR does not help the Revenue on this aspect, and in any case the said decision is not an authority for the proposition that price contained in the Broker Note, based on a commodity exchange, is not a valid CUP data. Thus the rejection by the TPO of the price publication of Oil World and the prices quoted by MMSPL, which are based on the rates quoted on CBOT, Chicago, is not justified. No reason for the income tax authorities to have rejected the plea of the assessee that the stated values of the purchase of Soyabean and sunflower oils from the associated enterprises are at their arm's length price. Thus, we hereby direct the Assessing Officer to accept the stated value of the international transactions of import of oils from associated enterprises to be at an arm's length price. Thus, the addition of ₹ 29,70,31,153/- is directed to be deleted. - Decided in favour of assessee.
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