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TMI Blog2012 (12) TMI 1042X X X X Extracts X X X X X X X X Extracts X X X X ..... TPO, comprising of two parts viz. Rs. 7.68 crores towards freight receipts and Rs. 12.13 crores towards freight payments. 3. Briefly stated facts of the case are that the assessee a joint venture between Lemuir Air Express, India (51%) and Deutsche Post International B.V., Nether lands (49%) carried on the business as a logistics service provider offering a comprehensive portfolio of international, domestic and specialised freight handling services. The assessee conducted five types of international transactions totalling Rs. 129.72 crores. Presently we are concerned only with two international transactions i.e payment of freight expenses to AEs amounting to Rs. 73.71 crores and receipt of freight revenue from AEs at Rs. 50.14 cores. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capacity of destination company in India. Here it is relevant to mention that the assessee applied Transactional Net Margin Method (TNMM) in its Transfer Pricing Study as the most appropriate method for working out the ALP of these international transactions. During the course of proceedings before the TPO, the assessee filed a letter dtd. 3rd October, 2006 advocating the application of comparable uncontrolled method (CUP) stating that DHL group of companies entered into agreements with third party strategic alliance in various countries where Deutsche Post International PV network did not exist. It was stated that the terms and conditions applicable to the companies were the same for agents and third parties affiliates. Two sample agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterprises in terms of section 92B(2). 6. The short controversy before us is to determine the ALP in respect of transactions between the assessee and its AEs towards receipt/payment of freight. The assessee shared profit in the ratio of 50:50 both on the payments made by it and the receipts of freight from its AEs. We have perused the submissions and the finding of the ld. CIT(A) on the functions performed, assets employed and risk undertaken by both the AEs in such transactions. The ld. DR could not controvert such finding that the functions performed, assets employed and risk undertaken in both the AEs is same. The assessee paid certain sum to its AEs abroad for doing the work similar to which it did for which it received freight ..... X X X X Extracts X X X X X X X X Extracts X X X X
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