Transfer pricing margin under MAP must be separately examined for non-MAP transactions before a speaking order is passed.

Transfer pricing margin accepted under MAP for some related-party transactions was not automatically extended to the remaining non-MAP transactions; the Tribunal held that those transactions required a separate, reasoned examination of the comparable margin. As the first appellate authority had not satisfactorily adjudicated that aspect, the matter was restored for fresh consideration with a direction to pass a speaking order after giving adequate hearing. The assessee succeeded on the issue for statistical purposes.

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Issues: Whether the transfer pricing margin resolved under Mutual Agreement Procedure for certain related-party transactions could be applied to the remaining transactions, and whether the disputed transfer pricing issue required fresh adjudication by the first appellate authority.

Analysis: The Tribunal noted that the assessee's contention was that the mark-up accepted under the MAP resolutions for the US and UK transactions should also be extended to the remaining non-MAP entities, and that the first appellate authority had not rendered a proper finding on the comparable margin for those transactions. Relying on coordinate bench precedent, the Tribunal accepted that the matter required a reasoned examination of the margin applied to the non-MAP transactions and that the issue had not been satisfactorily adjudicated.

Conclusion: The disputed transfer pricing issue was restored to the file of the first appellate authority for fresh adjudication with a direction to pass a speaking order after granting adequate opportunity of hearing. The assessee succeeded on this issue for statistical purposes.

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