Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 570 - AT - Income TaxTP Adjustment - adjustment made towards international transactions of the assessee with its associated enterprises - Most appropriate method - benchmarking of transaction - adjustment towards few transactions by adopting CUP as most appropriate method and few as TNMM - TPO has never disputed TNMM method adopted by the assessee and has accepted the fact that the TNMM as most appropriate method in respect of 100% of transactions, except few transactions of export of threads - HELD THAT:- It is incorrect to adopt two methods for one class of transactions and bench mark such transactions by cherry picking few transactions out of a lot of transactions undertaken by the assessee with its AEs and this principle is supported by the decision of ITAT Pune Bench in the case of Amphenol Interconnect India Pvt. Ltd. [2014 (5) TMI 1066 - ITAT PUNE] where an identical issue has been decided by the Tribunal and after considering relevant facts held that when the TPO has accepted 90% of export to the AEs are at ALP, there is no reason to apply CUP method for remaining part of the exports. Also held that when the TPO has accepted TNMM as most appropriate method for an overwhelming majority of exports to AEs, then there is no reason why for the balance of exports of goods, TNMM method should be not be applied. In this case, the TPO has accepted 99.95% of export of threads to AEs under TNMM method, but he had cherry picked 0.05% of transactions and applied CUP method without there being any valid reason. Therefore, we are of the considered view that the TPO is erred in adopting CUP method for few transactions when he has accepted overwhelming majority of transactions under TNMM method. The DRP without appreciating the above facts, simply sustained TP adjustment suggested by the TPO. Hence, we direct the AO/TPO to delete TP adjustment made towards few transactions by adopting CUP as most appropriate method. Appeal of assessee allowed.
|