TMI Blog2013 (5) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... monds from outside India and exporting the same after processing and polishing the rough diamonds. The AO during the assessment proceedings noted that the assessee had purchased rough diamonds worth ₹ 15, 33,60,532/- from the AE situated in Belgium. The assessee had also sold polished diamonds worth ₹ 7, 25, 50,026/- to the AE at Belgium. Since the assessee had entered into international transactions with the AE the AO referred the matter to Transfer Pricing Officer (TPO) for determination of arms length price of the transaction with a view to make adjustment to the total income. The TPO did not recommend any adjustment in relation to the purchase of rough diamonds. He however, asked the assessee to submit transfer pricing study ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. 138.03 134.26 3.77 2.73 2.81 Uni-Gem India Pvt. Ltd. 158.60 153.033 5.57 3.51 3.64 Mohit Diamonds Pvt. Ltd. 216.67 201.62 15.05 6.95 7.46 Firestone International Pvt. Ltd. 534.80 519.11 15.69 2.93 3.02 Su-Raj Diamonds Jewellery Ltd. 576.55 549.45 27.1 4.70 4.93 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of CIT(A) both the parties are in appeal. The revenue is aggrieved with the decision of CIT(A) excluding 9 comparables selected by TPO and allowing the benefit of +/- 5% range to the assessee whereas the assessee has disputed the method as well as margin applied by the CIT(A) and has also pointed out mistake in not taking the correct value of AE sales. 4. Before us learned AR for the assessee at the very outset submitted that the assessee did not want to pursue any dispute relating to selection of comparables or the margin adopted either by the TPO or by CIT(A) and the TNMM method applied by them. It was submitted that the only objection of the assessee was against the computation of TP adjustment with respect to whole operating cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the international transaction. In this case the assessee who was engaged in the business of purchasing rough diamonds and exporting polished diamonds had made export of polished diamonds to the AE at ₹ 15,52,52,361/- ( incorrectly taken by TPO as ₹ 7,25,60,026/-. The TP adjustment has been computed using TNMM method on the basis of 12 comparables selected by the TPO which gave mean margin of 5.95%. CIT(A) has excluded 9 comparables and upheld only 3 comparables which gave mean margin of 6.28%. The TPO had computed the adjustment at ₹ 11706870 which had been reduced by CIT (A) to ₹ 89,04,458/-. Both the TPO and CIT(A) had taken the AE sales at ₹ 7,25,50,026/- which was based on the original audit report. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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