TMI Blog2021 (1) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the TPO, which did not properly fit into the application mechanism. Those were the raison d etre for discarding their application. For example, the assessee wrongly considered foreign AE as a tested party or did benchmarking under the TNMM in an aggregate manner. The Tribunal did not approve this. Both these fall in the domain of wrong application of method. Similarly, the TPO did not select any comparable uncontrolled transaction under the CUP method, which got disapproved by the Tribunal in its order u/s 254(1) of the Act. This is again an instance of wrong application of method. Overruling the wrong application of the method doesn t mean ruling out the selection of that Method as well. If the wrong application of a method is cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Tribunal has restored the issue of determination of the Arm s Length Price (ALP) of the international transaction of payment of Management Fees to the AO/TPO with a direction to select the correct method and then determine its ALP. He submitted that the Tribunal, in its order u/s 254(1), has rejected the selection of the Cost Plus method (CPM), the Transaction Net Marginal method (TNMM) and the Comparable Uncontrolled Price (CUP) method. It was put forth that a precise method to be selected for the ALP determination should be directed rather than leaving it as such. This was opposed by the ld. DR, who submitted that there is no infirmity in the Tribunal order leaving the selection of method open to the TPO. 2. We have heard the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed reasons as to how these methods were wrongly applied. 4. At this juncture, we want to underscore that there are two things relevant in ALP determination qua the most appropriate method viz., first, selection of the method and second, its application. What has been faulted with in the impugned order is the wrong application of the methods and not the wrong selection of methods. In other words, the Tribunal observed certain inconsistencies in the application of the methods by the assessee and the TPO, which did not properly fit into the application mechanism. Those were the raison d etre for discarding their application. For example, the assessee wrongly considered foreign AE as a tested party or did benchmarking under the TNMM in an ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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