9911796707
TMI Blog2011 (8) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... Uncontrolled Price (CUP) method. 2. The assessee is an associate of a multi-national group M/s. Kuok Group. The assessee enters into business transactions with M/s. Kuok Oils and Grains Pvt. Ltd., having its headquarters at Singapore. The associate concern is engaged in food business from processing to packaging. It is also trading in oils, oil seeds, grains and other products. The assessee imports edible oil from the associate concern and sells the same on high seas sale basis and also in local markets. 3. For the assessment year under appeal, the assessee has reported international transactions in the form of edible oils worth US$ 2,35,30,749.06. According to the assessee, the transactions have been entered into at ALP, computed on CUP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comparison of similar cases. 6. The assessee replied that the assessee was paying the price for import of oils to its Associate Enterprise (AE) on the basis of sale contracts entered into between the parties which of course, was determined on the prevailing market conditions. But the TPO has adopted the average of the Customs tariff rate at Kandla Port, on the date of entry. There is a time gap between the original contract of sale and entry of the goods into Kandla Port as the goods are transported from overseas only after the execution of sale contract and reaches at Kandla Port after days of voyage. Because of this time gap between the sale agreement and date of Port entry, it is possible that there would be rate fluctuation. It does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his method is not a proper one. 9. There is no material on record to show that the price entered into between the parties on the date of contract was not comparable to similar transactions entered into on that day. It means that a price reflected in the sale contract entered into between the assessee and its AE is very much comparable to the market rate prevailed on that day. Therefore, compared to the illogical comparison made by the TPO, the price fixed by the parties on the basis of sale contract is more authentic and acceptable. The difference between the assessee's invoice rate and the average Customs rate at Kandla Port is nominal. The difference goes beyond the permissible 5% range only when the TPO has adopted the average of the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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