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2024 (3) TMI 1068 - ITAT DELHITP Adjustment - MAM - “other method” used by the assessee for carrying out the arms length analysis for purchase of traded goods rejected - TPO proceeded by applying TNMM as the most appropriate method for bench marking assessee’s international transactions by doing fresh search for comparables - assessee is engaged in trading of edible oils whereas all the comparables mentioned here in above are in manufacturing of edible/ non edible oils. HELD THAT:- Since the market quotes were available on corresponding dates and when corresponding dates data was not available on the date of contract entered between the assessee and its AE, therefore, in our considered view the “other method” has been rightly applied by the assessee. As given a thoughtful consideration to the orders of the TPO we are of the considered view that the TPO has failed to analyze the TP documentation prepared by the assessee. We find that the assessee has appropriately compared the prices of third party brokerage houses / associations/ exchanges where ever available during the time of preparation of the TP documentation. Assessee has considered all the market quotations available while maintaining the transfer pricing report and considering the contemporaneous nature of documentation process as provided under the relevant provision of the Act. Thus if any third party rate is not considered for a particular date of contract due to non availability of the data would not give right to the TPO to reject the method adopted by the assessee. We find that the assessee has considered the rates based on the average of available third party market quotations of Murgi Meghan, Sunvin Group, Malaysian Palm Oil and Solvent Extractors and not specifically to any single broker rate. The objective of applying of any transfer pricing method is to determine the arm’s length price for a given transaction and not to justify any transfer price at which the transaction may have been under taken - If there is a difference between arm’s length price determined by a particular method and the transfer price adopted by the assessee, it may warrant the transfer pricing adjustment, in case such variation is not within the permissible tolerance range specified in the Act. However, such variations cannot be the basis of questioning appropriateness of the method. A perusal of the order of the TPO show that he has mentioned a difference of Rs. 97,36,699/- and rejected the applicability of “other method”. In our humble opinion this difference is miniscule when considered with the total value of international transaction of Rs. 729 crores. - Decided in favour of assessee. Enhancing the income of the Appellant pertaining to the purchase of traded goods that allegedly do not satisfy the arm's length principle envisaged under the Act - HELD THAT:- Documentation of arm’s length price by the assessee by adopting quotations from various brokerage houses/ associations/ exchanges cannot be faulted with and, therefore, all the decisions relied upon by the DR are distinguishable on facts. Decided in favour of assessee.
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