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2015 (10) TMI 468 - AT - Income TaxDetermination of arm’s length price - whether method adopted by the Assessing Officer to determine arm’s length price is not correct and is in violation of the Transfer Pricing Regulation as existing in India? - whether the actual profit can be calculated on the basis of comparing the gross profit of subsequent years of the assessee itself? - CIT(A) deleted the addition - Held that:- According to Provisions of Section Rule 10B(4), the data to be used in analyzing the comparability of uncontrolled transaction with an international transaction shall be data relating to financial year in which international transaction has been entered into: provided that data related to period not being more than two years prior to such financial year may also be considered if such data reveals facts which could have an influence to transactions being compared. There in nothing in the provisions of Rule 10B(4) that data of subsequent years should be taken into to determine arm’s length price. In this factual and legal background, it is evident that method adopted by Assessing Officer to determine arm’s length price is not correct and not in accordance with transfer pricing regulation as existing in India. Accordingly, addition made by Assessing Officer by way of Transfer Pricing Adjustment on this account was rightly deleted by CIT(A). This reasoned finding of CIT(A) needs no interference from our side, we uphold the same. - Decided against revenue.
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