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2022 (9) TMI 867 - ITAT VISAKHAPATNAMTP Adjustment - MAM Adjustment - ALP adjustment - Comparable Uncontrolled Price (CUP) method adopted as the MAM for the purchases and the CPM adopted by the assessee for the sales made to the AEs - HELD THAT:- As substantiated that the price of imports from the group companies will have impact on the export pricing charged to the group companies. This is also evident from the Cost Accountant certificate where the per unit meter cost of the elastic in respect of the goods supplied to the AE is lower than the per unit meter cost of the elastic supplied to unrelated parties. Unlike the CUP method, TNMM does not require that comparable companies as to manufacture exactly the same product as that manufactured by the tested party. In TNMM what is to be seen is the functional comparability and not the product comparability. Further, it is observed that the Ld. AR has not objected to the comparables made by TPO under TNMM, but the assessee has come up with a set of 7 comparables under TNMM wherein the average OP/OC works out to 2.83%. As observed from the financials submitted by the AR that 71% of the elastic produced during the FY has been exported to AEs. AR also in his submissions accepted that the production price is similar and the ultimate finished goods are similar in properties and hence are comparable. Since the ultimate finished goods are similar in nature and properties, the submission of AR contradicts on the fact that the price per meter charged for AEs is far below the price per meter charged to non-AEs, where the difference is significant. TNMM adopted by the Ld. Revenue Authorities would be Most Appropriate Method for determining the ALP of the international transactions entered into by the assessee with the AE. We do not find any infirmity in the order of the DRP on this issue and the same is confirmed. Appeal of the assessee is dismissed.
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