Transfer pricing adjustment challenged the use of differential...

Transfer pricing adjustment challenged the use of differential commission rates by revenue authorities; the TPO/AO applied an ad hoc thumb rule without evidentiary comparables. Treating commission received as the arm's length price for benchmarking commission paid was held impermissible where transactions were not between uncontrolled parties or concluded on uncontrolled conditions. Consequently, the impugned addition was deleted. The AO is directed to give effect to this order and reassess and charge interest consequentially under the relevant tax provisions, and to verify the filing due date before considering interest under the return filing provision.