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2015 (5) TMI 436 - HC - Income TaxTransfer pricing adjustment - determination of ALP - ITAT in the impugned order discussed the nature of transactions and noticed that for benchmarking international transactions the AE had adopted the most appropriate method i.e. ANMM with PLI ratio (Indian law gives the dictates of Rule 10B of Income Tax Rules) - whether the TPO - and consequently the AO fell into error in not accepting the clubbing of transactions suggested by the assessee - Held that:- Issue which it is concerned with is AY i.e. 2009-2010 involves extremely restricted one. Having clubbed the transactions for the purpose of ALP determination whether the TPO/AO could have refused to follow the logic and consider the comparable profits from non-AE transactions in both segments is in issue. All that the ITAT did, in our view, was to cure this defect or anomaly and direct the AO to consider the margin of commission in each segment while determining the ALP. We at the same time clarify that the AO - who is now directed to carry out the exercise shall do so by applying principles in Rule 10(B) of the Income Tax Rules. The appeal is disposed of but in terms of above directions. It is clarified that this Court is not in any way disturbing the Tribunal’s direction to determine the rate of commission in either segment.
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