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2022 (1) TMI 81 - AT - Income TaxTP Adjustment - determination of ALP of international transaction in the nature of payment of management fees - Selection of MAM - HELD THAT:- It is pertinent to mention here that there is no dispute on the legal proposition that if the TPO finds that the method applied by the appellant is not appropriate, it can carry out his own analysis however he has to follow the methodology as provided in Chapter-X of the Income-tax Act. As further be noted that the starting point for applying the CUP method as per the transfer pricing provisions is availability of the price of the same product or service in uncontrolled conditions and according to that the ALP of the product or service can be ascertained. Thus, the action of TPO of applying CUP method and at the same considering the value of such transaction as Nil in absence of comparable uncontrolled transactions, is in itself contradictory and without any basis/logic. Therefore, the contention of the TPO to apply CUP method as MAM is not tenable under the law. Hence, based on above, we disapprove the action of CIT(A) treating the management services provided by the AE to the appellant as duplicate service and consequent determining its ALP at Nil. The appellant succeeds on other grounds raised before us. The transfer pricing adjustment made by the TPO and upheld by CIT(A) is hereby deleted.
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