TaxTMI 
TaxTMI 
2012 (11) TMI 462
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....e. The Assessee commenced trading activities in the year 20000, trading coffee, cotton, cocoa and other commodities. 2. During the impugned year, the assessee has traded only in coffee. The assessee procures green coffee beans from coffee planters or traders located in Karnataka. 3. For the assessment year 2007-08, the assessee filed its return of income on 28-10-2007 declaring total income of Rs. 1,53,72,954/-. The ld. DCIT selected the assessee's return for scrutiny by issuing a notice under section 143(2) on 09-8-2008. 4. As the assessee's international transaction exceeded Rs. 15.00 Crores the ld. DCIT made a reference to the ld. transfer pricing officer (TPO) 5. The ld. TPO vide his order dated 06-10....
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....ith the associated enterprises. The assessee selected CUP method as the most appropriate method for determining the ALP. The assessee relied on the monthly prices quoted by the Coffee Board and compared it with that of the prices paid by the AE to the assessee. The TPO found that the T.P documents did not contain the details of how the CUP method was applied. The TPO also found that the assessee had charged prices to the AE which were less than the price at which Coffee Board supplied green Coffee. The TPO therefore, worked out the ALP and by bench marking the price at which the Coffee Board sold different varieties of Coffee seeds and arrived at a sum of Rs. 71,82,407.84 as difference in price which the assessee ought to have charged the A....
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.... charges higher price he cannot sell his stock as consumers will go to other traders. Likewise, if one trader charges less price he may attract more consumers in short run but ultimately he will be out of business in view of the fact that he will sustain loss. This being the position n case of agricultural products, monthly price list issued by the Coffee Board of India in respect to different qualities of Coffee beans is reliable and can be used as uncontrolled comparable price in CUP method. The decision of Hon. ITAT in the case of Aztech Software & Technology Services Ltd. v. Asstt. CIT [2007] 294 ITR (AT) 32 (Bang.) does not contradict our observation in case of Coffee beans. The Tribunal decided that industry average billing rates cann....
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....Products Ltd" are not available in the public domain. Thus, in our view without proper information relating to the activities carried on by the company "India Products Ltd.," and also the segmental information relating its income from various sources and activities, the said company cannot be taken as comparable for computing the ALP. According to us, the DRP has not dealt with the issue in a judicious manner. In view of the same, we deem it fit and proper to remit the issue to the file of the AO/TPO for reconsideration of the objections raised by the assessee against the method of computing the ALP i.e. what is the most appropriate method, CUP or TNMM and also the comparables adopted by the TPO. Thus, the issues are set aside for de-novo c....