Entity-level TNMM prevails over internal Cost Plus Method; reversal of provisions and TDS/TCS credit require verification.

Entity-level TNMM was preferred over an internal Cost Plus Method where the assessee's functional profile and facts remained unchanged and its own earlier years had accepted TNMM; the transfer pricing adjustment was therefore deleted, reflecting the need to follow consistent precedent on identical facts. An intimation adjustment on reversal of provisions was treated as requiring verification because the provisions had already been disallowed on creation and could not be taxed again without checking for double taxation; the matter was remanded for limited factual examination. Short grant of TDS/TCS credit was also held to be verification-based, with credit to be allowed after examination of Form 26AS/AIS and supporting records.

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Issues: (i) Whether the transfer pricing adjustment could be sustained by rejecting the assessee's entity-level TNMM and applying internal Cost Plus Method; (ii) whether the adjustment arising from the intimation under section 143(1) on reversal of provisions was sustainable; (iii) whether the short grant of TDS/TCS credit required verification and correction.

Issue (i): Whether the transfer pricing adjustment could be sustained by rejecting the assessee's entity-level TNMM and applying internal Cost Plus Method.

Analysis: The assessee had adopted TNMM at entity level and the same approach had been accepted in its own case in earlier years on identical facts. No material change in the functional profile or factual matrix for the year under consideration was shown. The internal Cost Plus Method adopted by the Transfer Pricing Officer was not supported by any distinguishing facts, and the approach of disregarding coordinate bench decisions merely because the issue was pending before higher forums was found unsustainable. Judicial discipline required following the consistent view already taken on identical facts.

Conclusion: The transfer pricing adjustment was deleted and TNMM at entity level was held to be the most appropriate method, in favour of the assessee.

Issue (ii): Whether the adjustment arising from the intimation under section 143(1) on reversal of provisions was sustainable.

Analysis: The disputed provisions had already been disallowed in the year of creation, and their reversal during the year could not again be brought to tax without resulting in double taxation. The assessee also placed a revised tax audit report and auditor's certificate to explain the mismatch, but the factual verification of the earlier disallowance and the reconciliation needed to be examined by the Assessing Officer. The proper course was therefore to restore the matter for limited verification and fresh decision after affording opportunity of hearing.

Conclusion: The issue was remanded to the Assessing Officer for verification and was allowed for statistical purposes, in favour of the assessee.

Issue (iii): Whether the short grant of TDS/TCS credit required verification and correction.

Analysis: Grant of credit for TDS and TCS was verification-based and consequential in nature. The claim required examination of Form 26AS/AIS and supporting evidence, and due credit was to be allowed after verification.

Conclusion: The issue was restored to the Assessing Officer for verification and was allowed for statistical purposes, in favour of the assessee.

Final Conclusion: The appeal succeeded on the transfer pricing issue and the remaining issues were sent back for verification, resulting in an overall disposal in favour of the assessee on a statistical basis.

Ratio Decidendi: Where identical facts in the assessee's own case have been consistently decided in its favour, the Tribunal should follow the settled view in the absence of any material factual change; and an adjustment that would tax the same item twice cannot be sustained without verification of the underlying claim.

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