Additional transfer pricing evidence accepted, with fresh verification ordered on segmental allocation and internal CUP benchmarking.

Additional evidence and revised segmental accounts were accepted because they were materially relevant to transfer pricing benchmarking and the existing record was incomplete. The Assessing Officer/Transfer Pricing Officer was directed to verify afresh the allocation of expenses, the revised segmental report, and the availability of an internal comparable uncontrolled price for books purchased from the associated enterprise, after granting the assessee a proper opportunity of hearing. The matter was thus restored for fresh examination of the arm's length price, with relief given on the transfer pricing grounds.

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Issues: Whether the assessee's additional evidence and revised segmental accounts relating to transfer pricing benchmarking should be admitted and the international transactions, including the internal comparable uncontrolled price, should be re-examined by the Assessing Officer/Transfer Pricing Officer.

Analysis: The assessee produced additional material to support the segmental allocation of expenses and to benchmark the international transactions on the basis of details prepared in line with the later assessment year findings. The material was considered relevant for proper adjudication of the transfer pricing adjustments. In the interest of complete justice, the additional evidence was accepted and the matter was directed to be verified afresh. The Assessing Officer/Transfer Pricing Officer was also directed to examine the allocation of expenses, the revised segmental report, and the availability of an internal comparable uncontrolled price for the purchase of books from the associated enterprise, after giving the assessee a proper opportunity of being heard.

Conclusion: The issue was restored to the file of the Assessing Officer/Transfer Pricing Officer for fresh verification, and the assessee obtained relief on the transfer pricing grounds.

Ratio Decidendi: Where additional evidence is materially relevant to transfer pricing benchmarking and the existing record is incomplete, the authority may admit such evidence and remit the matter for fresh examination of arm's length price with due opportunity of hearing.

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