Internal TNMM comparables applied for manufacturing segment transfer pricing, with arm's length price to be recomputed afresh.

Transfer pricing adjustment for the assessee's manufacturing segment was required to be recomputed under internal TNMM, as the assessee relied on earlier orders in its own case supporting internal comparables and the Revenue showed no distinguishing feature from prior years. Applying judicial consistency, the matter was restored to the Transfer Pricing Officer to determine the arm's length price afresh with reference to the assessee's internal comparables in accordance with law, resulting in partial relief to the assessee.

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Issues: Whether the transfer pricing adjustment in respect of the assessee's manufacturing segment international transactions should be recomputed by the Transfer Pricing Officer by adopting the assessee's internal comparables under the internal TNMM.

Analysis: The assessee relied on earlier orders in its own case supporting internal TNMM for the manufacturing segment. The Revenue did not show any distinguishing feature from the earlier assessment years. In these circumstances, judicial consistency was followed and the matter was left to the Transfer Pricing Officer to recompute the arm's length price with reference to the assessee's internal comparables in accordance with law.

Conclusion: The issue was restored to the Transfer Pricing Officer for fresh computation on the basis of internal comparables, and the assessee obtained partial relief.

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