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2019 (1) TMI 345 - AT - Income TaxTPA - Addition on account of adjustment in sales price - MAM -mechanism for selecting the most appropriate method - CUP method application - Held that:- A method of determining arm’s length price, to be held as a ‘most appropriate method’ (MAM), should be, as provided in rule 10C(1), a method “which is best suited to the facts and circumstances of each particular transaction” and a method and “which provides the most reliable measure of arm’s length price of the international transaction”. Under rule 10C(2)(c), “the availability, coverage and reliability of data necessary for application of the method” is one of the crucial factors determining suitability of a method of determination of arm’s length price in a particular fact situation. Quite clearly, therefore, unless suitable reliable data inputs necessary for application of a particular method, as CUP in this case, are available, CUP method cannot be said to be most appropriate methods on the facts of this case. What has been relied upon by the TPO is Internal CUP data but then rather than taking the comparable uncontrolled price of the transaction, the TPO has compared average of intra AE transactions and independent transactions. We donot see legally sustainable merits in the case of the learned Commissioner (DR) and we reject his plea that on the facts and in the circumstances of this case, CUP method is required to be applied. In any case, the issue is squarely covered by the decision of the coordinate benches, in favour of the assessee. Addition on account of Guarantee fees - International transactions - Held that:- As decided in assessee's own case issuance of corporate guarantees does not constitute an international transaction with the meanings of section 92B. Learned representatives fairly agree that the issue is thus covered, in favour of the assessee and in assessee’s own cases, by coordinate benches of Tribunal. Addition on account of addition u/s 145A - Held that:- we see no need to interfere with the findings of the CIT(A) on this ground either. The law is by now well settled. There is no impact on profitability whether the assessee follows the exclusive method or inclusive method, and there cannot be an addition, thus, on that score. That is what the coordinate benches of this Tribunal, including in the cases of ITO Vs Mamta Brampton Engineering Pvt Ltd [2016 (10) TMI 694 - ITAT AHMEDABAD] have consistently have consistently relying upon the judgment of Hon’ble Supreme Court in the case of CIT Vs Indo Nippon Chemicals Ltd [2003 (1) TMI 8 - SUPREME COURT] and ACIT Vs Narmada Chematur Petrochemicals [2010 (8) TMI 263 - GUJARAT HIGH COURT]. Learned Departmental Representative does not dispute this position Addition on account of disallowance under section 10B to be deleted relying on assessee’s own cases for the assessment years 2006-07, 2007-08, 2008-09 and 2009-10 Claim of deduction under section 10B to be allowed.
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