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2016 (7) TMI 249 - AT - Income TaxAddition by recomputing the arm’s length price of the international transactions under sec. 92 - selection of MAM - CUP or TNMM - Comparable Companies selected by the TPO in the application of TNMM to determine the arm’s length price - international transaction pertaining to “purchase of DAP” - Held that:- We fully concur with the contention of the assessee that Rule of Consistency needs to be respected in the approach of the Revenue in the application of CUP method as the most appropriate method particularly when there is no change in either the profile of the assessee or in the nature of the transaction. We also agree with the submission of the assessee that TNMM method is not an appropriate method since the sale price in the present case is regulated by the government and the margin of net profit is not under the control of the tax payers. It is not appropriate to apply TNMM method also for the reason that merely 40% to 45% of the receipts are by way of subsidy from the government and not from sale of the product. The submission of the assessee that the relevant data for the application of CUP method is available in public domain has not been disputed by the Revenue. It is an undisputed position as well that crucial factor for determining the appropriateness of the method to be applied are the availability and reliability of the data. In view of these material facts, we come to the conclusion that CUP is the most appropriate method in order to benchmark the transaction pertaining to purchase of DAP Fertilizers and direct the learned TPO to apply the same for the benchmarking the transaction in question. In view of the above findings, the alternative plea of the Learned AR that the comparable chosen by the learned TPO are not at all the right comparable as these entities are engaged in manufacturing and sale of the product and not in the trading of the product as the assessee is, does not need consideration
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