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2018 (10) TMI 1112 - AT - Income TaxTransfer pricing - determination of ALP - comparable selection - selection of MAM - application of CUP method as against TNMM - R&D activities and and providing related engineering and technical support and services - determining the arm's length price ('ALP') of the Appellant's international transactions pertaining to payment of management cost contributions (after allowing network administration costs) to its Associated Enterprise (AE) - TP documentation - Held that:- the rise in profit is definitely not a relevant factor and hence not determinative of the issue - a business decision, may at times turn out bad and unprofitable for various reasons as necessarily all business decisions cannot always meet with success. Accordingly, the question whether the decision was commercially sound or not was consequently held to be not relevant for deciding the issue. Referring to views followed in 2009-10 and 2012-13 AYs the issues are remanded back to the file of the TPO directing that qua the claim of management cost, the TPO shall, considering the past history to decide the issues in terms of the directions first determining the nature of transaction whether the payment made in terms of the Cost Contributing Agreement were cost sharing arrangement or in the nature of intra-group services and thereafter determine the issue of selection of most appropriate method which the Co-ordinate Bench has directed to first apply CUP using some comparable instances following Rule 10B(1)(a)(i) and in the eventuality the TPO comes to the conclusion that the relevant data is not available, he is free to select any appropriate method for fresh determination of ALP after hearing the assessee. Similarly, qua the R&D expenses etc. the Co-ordinate Bench remanded the issue back. The appeal of the assessee is allowed for statistical purposes.
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