TMI Blog2016 (5) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... t arise - Decided in favour of assessee Addition made on account of rejection of Comparable Uncontrolled Price(CUP)in respect of the international transactions - Held that:- We find that the assessee had imported MEL on 27. 1. 2009 @ ₹ 25. 87 per Kg, that the CUP rate as on 30. 1. 2009 was ₹ 26. 71 per Kg, that the rate adopted by the assessee fits within the ± 5% of the CUP range. In our opinion the date chosen by the assessee was more appropriate than the date adopted by the TPO. The DRP itself had held that nearest CUP data should be considered. In the case under consideration the assessee had adopted the data of 30th January which was the nearest date for the transaction in question. Therefore, in our opinion adjustment m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premium by the petitioners to its non -resident holding company does not give rise to any international transaction, that in such a case application of the provisions of Chapter X of the Act would not arise. Respectfully, following the above judgment of the Hon ble Bombay High Court, we decide Ground no. 1 in favour of the assessee. 3. Second ground of appeal as about addition made on account of rejection of Comparable Uncontrolled Price(CUP)in respect of the international transactions entered in to by the assessee with its Associated Enterprises(AEs). During the assessment proceedings, the AO made a reference to the Transfer Pricing Officer (TPO)to determine the Arm s Length Price(ALP)of the international transactions of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 27. 54 per kg, that the transaction was not at arm s length. The DRP held that beyond the nearness of date the assessee had not mentioned as to how the transaction was otherewise comparable in terms of volume or any other details, that in absence of such details the method adopted by the TPO had to be upheld. 3. 1. Before us, the Authorised Representative(AR) argued that the DRP itself had upheld the nearest date approach adopted by the assessee, that the date chosen by it was 88 days from the actual transaction that TPO s CUP date was 301 days from actual date, that on 01. 08. 2008 the rate for all quantities was same, that volume had no impact on rate. Departmental Representative (DR) supported the orders of the TPO and DRP. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t rates from the data used by the assessee and held that there were six transactions ranging from 75000kg. to 5 lakhs Kgs. , that price range varied from ₹ 44. 18 to ₹ 55. 91, that the assessee had purchased huge quantity that such bulk purchase would have resulted in lower purchase price, that the assessee had extrapolated the price to fit itself in to 5% band, that the data field was mathematically unreasonable. The DRP upheld the order of the TPO. 4. 1. Before us, the AR argued that volume of the transactions did not impact the rates, that trend did not indicate that volumes affected the rates, that the TPO had cherry picked the rate, that the TPO was not consistent in selecting the comparables. DR supported the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tities of the day were ignored, that the assessee had taken the arithmetical mean of the price as ALP. DR relied upon the order of the TPO. 5. 2. We find that the assessee had taken the average price for determining the ALP, whereas the TPO had taken the lowest price. As held earlier the practice of cherry picking should be avoided while invoking the provisions of Chapter X of the Act. From the date it is clear that 1. 20 lakh Kgs. goods were purchased @ ₹ 78. 43 Rs. per Kg. Similarly, 41, 000Kgs. goods were purchased @Rs. 76. 28 per Kg. We also find that the TPO had accepted the assessee s CUP dt. 30. 7. 2008 while determining the ALP of transaction dt. 29. 7. 08 for a transaction of One lakh Kgs. (pg-92 of the PB). considering th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The DRP itself had held that nearest CUP data should be considered. In the case under consideration the assessee had adopted the data of 30th January which was the nearest date for the transaction in question. Therefore, in our opinion adjustment made by the TPO was not proper. 8. Now we would take transaction No. 6 . The assessee had purchased 4 lakh Kgs of Toluene @Rs. 26. 38 per Kg. Since the comparable data for 12. 2. 2009 was not available the assessee used the data of 16. 2. 2009 (Rs. 26. 83 per Kg). The TPO chose to use data for 31. 1. 2009 (Rs. 24. 10 per Kg. ). The DRP upheld the order of the TPO referring to the earlier transactions. 8. 1Before us, the AR made same submissions made for the earlier year and stated that it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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