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2016 (9) TMI 403 - AT - Income TaxTransfer pricing adjustment - whether the price determined under MAP mechanism can be adopted even in respect of non- MAP transactions? - Held that:- We are of the considered opinion that this issue can be decided only by the TPO after undertaking FAR analysis of non-US transactions with a view to find out whether there is any distinction in the factors influencing the price between US and non-US transactions. Even in the decision relied on by the learned counsel for the assessee, the Hon’ble Tribunal had rendered a categorical finding that there is no such distinction. We, therefore, direct the TPO to adopt the same price. In the present case, no attempt has been made by the learned counsel for the assessee to bring out the similarities of the factors that influenced the price between US and non-US transactions. In the absence of this analysis, comparability may not be in terms of the provisions of rule 10B(1)(2) of the IT Rules, 1962. Therefore, we are of the considered opinion that the matter be restored to the file of the TPO/AO for fresh analysis on the lines between US and non-US transactions and if it is found that factors influencing the price are similar between US and non- US transaction, the price adopted for US transactions may be adopted for non-Us transactions also. Before we part with, we must make it clear that it is open to the TPO to examine the validity of the proposition that price adopted under MAP mechanism can be adopted in respect of other countries also where MAP was not resorted to. Reduction of telecommunication expenses export turnover - Held that:- As now the law is quite settled that while reducing telecommunication expenses from export turnover, the same should also be reduced from the total turnover on the reasons of parity as held by the jurisdictional High Court in the case of CIT vs. Tata Elxsi Ltd. (2011 (8) TMI 782 - KARNATAKA HIGH COURT ). Accordingly, we direct the TPO/AO to reduce the telecommunication expenses from the export turnover as well as the turnover while computing deduction u/s 10A of the Act.
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