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2023 (6) TMI 348 - AT - Income TaxTP adjustment - ALP determination - Selection or change in Most Appropriate Method (MAM) - “Other Method" v/s "CUP Method" - Option to resile / disagree with the Transfer Pricing Study Report (TPSR) - Special bench [SB] / Three Member Bench decision by Majority - international transaction of acquiring Bundle of Sport Broadcasting Rights - Is assessee entitled to switch over to a new method, different from the one taken in TPSR, as the most appropriate method? - HELD THAT:- As decided by R.S. SYAL, VP assessee, in principle, can resile from the most appropriate method as was adopted in its transfer pricing study report. As decided by PRASHANT MAHARISHI, AM - It is always possible that during the journey of determining Arm’s length price , MAM already considered is not appropriate , one can resile from the most appropriate method adopted in its transfer pricing study report with a caveat that provided the earlier method selected by the assessee or for that matter any assessing authority or appellate authority, does not fulfil the requirement of rule 10 C (2) of the rules and new MAM selected fulfils it. There is no bar to any of the parties in concluding the most appropriate method by reselling the earlier method selected by it, if it is confirming to the requirement of rule 10C (2) of The Income Tax Rules. Thus, to that extent agree with the view expressed of VP. As decided by Shri Aby T. Varkey (J.M.) - As find in agreement with both learned brothers [VP and AM] that the assessee, in principle, can resile from the most appropriate method as was adopted in the TPSR, provided that the new method confirms to the requirement of Rule 10C(2) of the Income tax Rules, 1962. Moreover, this Tribunal being the last fact finding authority is duty bound to ascertain the correct facts, nature & class of transactions, the FAR analysis, reliability of data and thereafter arrive at the Most Appropriate Method to benchmark the impugned international transaction, which may resile from the Method adopted by the assessee in the TPSR. What is most appropriate MAM in the transaction under consideration? - “other method" v/s "CUP method" - As decided by R.S. SYAL, VP data required for the application of the CUP exists and is on record. We, ergo, hold that the CUP is the most appropriate method in the facts and circumstances of the case. As decided by PRASHANT MAHARISHI, AM - Most Appropriate Method to determine the arm’s-length price of the international transaction of sale of bundle of rights is the ‘other method’, the ALP of this international transaction is to be determined applying ‘other method’. As decided by Shri Aby T. Varkey (J.M.) find in agreement with the Ld. AM that the MAM to benchmark the international transaction in question is the ‘Other Method’ and not ‘CUP Method’. Before us, since no arguments were put forth regarding the manner of application of ‘Other Method’ and the deficiencies in the valuation report as pointed out by Ld. TPO, the instant appeal may be placed before the Division Bench on the issue of determination of ALP of the international transaction in question by adopting ‘Other Method’. Conclusion:- Assessee can resile from the most appropriate method as was adopted in its transfer pricing study report and determination of ALP of the international transaction in question by adopting ‘Other Method’ confirmed. Matter restored back to Division Bench.
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