TMI Blog2011 (7) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... nished any details on the calorific value of the coal imported by the assessee-company from its AE - The CUP method as construed in the statute has to be applied in the present case. When it is so applied, we find that the import of coal made by the assessee from its AE has been over-invoiced Regarding quantification of the adjustment - TPO has worked out the adjustment amount exactly on the basis of price variation between the companies. This is the most simple and acceptable method - Decided against the assessee - IT APPEAL NO. 2099 (MAD.) OF 2010 - - - Dated:- 13-7-2011 - DR. O.K. NARAYANAN, HARI OM MARATHA, JJ. Vikram Vijayaraghvan for the Appellant. P.B. Sekaran for the Respondent. ORDER Dr. O.K. Narayanan, Vic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 1440 MT of coal. The price quoted by M/s. Adam Coal Resources (P.) Ltd. was 43 USD per MT. The TPO found that the difference in the price between the consignment of the assessee-company and M/s. Adam Coal Resources (P.) Ltd., is substantial which has crossed the tolerance limit of plus or minus 5 per cent. In view of the above comparative values, the TPO came to the conclusion that the assessee has overstated its purchase price and thereby made it necessary to make adjustment in the purchase price of coal for the purpose of assessment. On the basis of the above price variation, the TPO computed the adjustment value at Rs. 3,49,14,706 and proposed an addition to the income of the assessee. 4. The issue was thereafter brought before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 005 another company, M/s. Adam Coal Resources (P.) Ltd., also had imported coal. A consignment of 1440 MT was offloaded at the rate of 43 USD per MT. There is a striking difference in the price quoted by the assessee and M/s. Adam Coal Resources (P.) Ltd. As rightly pointed out by the DRP, this difference exceeds even the tolerance limit. 6. The next question to be considered is whether this price variation noticed by the TPO should be taken as the basis for making adjustment in the transfer pricing. The grievance of the assessee is that the comparable price has been obtained by the TPO from the customs authorities and the valuation of the customs authorities need not necessarily be realistic as that department is more interested in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al market. This aspect has not been looked into by the TPO. Therefore, there is no rule that the coal imported by the assessee should be at the same price for which another assessee might have imported. When we examined this argument, we found that the assessee has not furnished any details on the calorific value of the coal imported by the assessee-company from its AE. The statement made by the Advocate is acceptable as a general proposition in comparing the prices of different import consignments. But that general proposition can be applied in a particular case only if relevant materials are available on record. In the present case, the assessee has not furnished any information on the calorific value of the coal imported by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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