TaxTMI 
TaxTMI 
2015 (1) TMI 302
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.... Rs. 1,13,83,104. During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee company has provided medical transcription services to its AE, viz. CSSI, USA, and a total amount of Rs. 10,63,10,324 was charged for such services. He, therefore, made a reference to the TPO under S.92CA(1) for determining the Arm's Length Price of the said international transactions entered into by the assessee company with its AE. In the TP study report, the said international transactions with its AE were benchmarked by the assessee by following CUP method and the reasons for following the said method being most appropriate method, were explained by the assessee before the AO/TPO as under- "(i) As mentioned above, during the year the appellant provided medical transcription services to its AE. The AE also received identical medical transcriptions services from independent third parties in India. The appellant has submitted CUP details of DHS Info Systems Pvt. Ltd. and Saral Software Solutions Private limited. (ii) CUP is the most direct method and the CUP method relies on identifying transactions of comparable products /service between related and u....
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....the most appropriate method to benchmark the international transactions of the assessee company with is AE and applying the same, he determined the Arm's Length Price of the said transactions at Rs. 15,49,48,592. Accordingly, in the assessment completed under S.143(3) read with S.92CA of the Act vide order dated 23.1.2012, the Assessing Officer made an addition of Rs. 4,86,38,268 to the total income of the assessee on account of Transfer Pricing Adjustment. 3. Against the order passed by the Assessing Officer under S.143(3) read with S.92CA(1), appeal was preferred by the assessee before the learned CIT(A) and various submissions were made on its behalf before the learned CIT(A) in support of its case that the TP adjustment made by the Assessing Officer/TPO by following TNMM was not sustainable, as the CUP method followed by the assessee was the most appropriate method to benchmark the international transactions with its AE. The said submissions, as summarised by the learned CIT(A) in her impugned order were as under- "(a) The rate per line paid by the Associated Enterprise was US $ 0.064 per line. Compared to other parties, since this being highest, the same is at Arm....
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..... Accordingly, following the decision of the Tribunal on similar issue in assessee's own case for assessment year 2005-06, the learned CIT(A) deleted the TP adjustment made by the Assessing Officer/TPO in the year under consideration, holding that the CUP method followed by the assessee to benchmark the international transactions with its AE was the most appropriate method in the facts and circumstances of the case. 5. Aggrieved by the order of the learned CIT(A), Revenue has preferred this appeal before the Tribunal. 6. We have heard the arguments of both the sides and also perused the relevant material on record. It is observed that similar Transfer Pricing Adjustment was made in the case of the assessee for assessment year 2005-06, and the order of the learned CIT(A) deleting the addition made in that behalf was upheld by the Tribunal for the following reasons given in paragraph 11 of its order dated 19.10.2012, cited supra- "11. We have heard the rival submissions and perused the materials on record. The facts of the case have been exhaustively dealt with by the CIT(A) in his order. It is a fact on record that the assessee has adopted the CUP method for computing t....
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....PO itself that in response to his show-cause notice dated 22.10.2008, the assessee has strongly objected to the proposal for applying the TNMM method and has requested for accepting the CUP method applied by the assessee. The assessee has submitted before the TPO that it has applied the CUP method after comparing the functions performed and the risks undertaken by each entity involved in the inter-company transactions. The TPO has brushed aside the objections of the assessee by simply observing that the assessee has not provided quantitative details with reference to the unrelated comparables. However, such finding of the TPO is again not correct, considering the fact that the assessee has furnished all the relevant information/data, requisitioned by the TPO from time to time. This fact is very much evident from para 1.1 of the order of the TPO itself. Therefore, the finding of the TPO that the assessee has not given the quantitative details is without any basis. It is a matter of fact that the assessee has submitted the agreements between the assessee and its AE as well as the agreements entered into by the AE with the other Indian companies and the agreements between the assessee....