Transfer pricing adjustment confined to associated enterprise transactions; broader application to non-AE dealings rejected.

Transfer pricing adjustment under Chapter X is confined to the international transactions with associated enterprises, not the assessee's dealings with non-associated enterprises. The Court treated that limitation as settled by binding precedent and rejected the Revenue's objection that the accounts could not be bifurcated. It also held that the challenge to the Tribunal's direction did not give rise to any substantial question of law, so the adjustment remained restricted to the AE segment alone.

---

---

Issues: Whether the transfer pricing adjustment could be restricted only to the international transactions with associated enterprises and not extend to transactions with non-associated enterprises.

Analysis: The question was already concluded by binding precedent of the same Court, which had held that under Chapter X the arm's length price adjustment is confined to the international transaction with the associated enterprise. The objection that the assessee's accounts made bifurcation impossible was not entertained, and the challenge to the Tribunal's direction to restrict the adjustment to the AE segment did not raise any substantial question of law.

Conclusion: The issue was answered against the Revenue and in favour of restricting the adjustment to international transactions with associated enterprises only; the Court declined to entertain Question (A).

Final Conclusion: The order limited the transfer pricing exercise to AE transactions and left the remaining question for consideration.

---