TMI Blog2017 (10) TMI 1471X X X X Extracts X X X X X X X X Extracts X X X X ..... benchmarked the transactions with the AE at the entity level ignoring the fact that the transactions with AEs are required to be benchmarked adopting the basis of proportionality - HELD THAT:- The principle of proportionality against Entity level benchmarking is approved in assessee s own case in various years. Considering the settled nature of the issue by the orders of the Tribunal in assessee's own previous years we are of the view that Ground No.10 raised by the assessee is required to be allowed in favour of the assessee to maintain consistency and judicial discipline. - ITA No.328/PUN/2014 - - - Dated:- 31-10-2017 - SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM For The Appellant : Shri Rajendra A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. Accordingly, Ground No.13 raised by the assessee is allowed for statistical purposes. 4. Referring to Ground No.10, Ld. Counsel for the assessee submitted that the same relates to incorrect computation of Transfer Pricing Adjustment to the manufacturing activity. 5. Narrating the relevant facts of this case, Ld. Counsel for the assessee submitted that the manufacturing activity of the assessee consists of the sales and purchases involving international transactions with AEs and Non-AEs. The AO/TPO/DRP erroneously benchmarked the transactions with the AE at the entity level ignoring the fact that the transactions with AEs are required to be benchmarked adopting the basis of proportionality. In this r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in favour of the assessee. 7. After hearing both the sides and perusing the orders of the Tribunal for A.Yrs. 2006-07 to 2008-09, we find it relevant to refer the relevant paras from the order of the Tribunal for A.Y. 2008-09. For the sake of completeness, we reproduce the operational Para Nos. 12 and 13 hereunder : 12. So far as ground No.7 is concerned, we find an identical issue had come up before the Tribunal in assessee s own case for the immediately preceding assessment year. We find the Tribunal has discussed the issue from paras 7 to 15 of the order and following the decision of the Tribunal in assessee s own case for A.Y. 2006-07 allowed the claim of the assessee by observing as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be done ideally considering the relatable sales drawing the quantitative relationship to the imports from the AEs, i.e. controlled cost. The principle of proportionality is relevant here and it is a settled law in this regard. In the situation like the one in the instant case of the assessee, there is data relating to controlled and uncontrolled cost particulars. This undisputed data is suffice to arrive the proportionate sales relatable to the international transaction with the AEs i.e. controlled cost. Accordingly, the ground no. 10 relating to incorrect computation of transfer pricing adjustment to the manufacturing activity is allowed pro tanto. 15. In view of aforesaid discussion we therefore, hold that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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