TaxTMI 
TaxTMI 
2019 (5) TMI 694
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.... "(A) Whether in the facts and circumstances of the case and in law was the Tribunal justified in upholding the order of CIT (A) benchmarking international transactions of sale of Valves to its Associated Enterprise (AE) viz. one L & T LLC by aggregating all its transactions with the A.E. and comparing it with aggregation of all comparable Non AE transactions? (B) Whether on the facts and circumstances of the case and in law was the Tribunal justified in law in upholding the order of CIT (A) deleting the Transfer Pricing Adjustment on export of Valves (Rs. 8,79,23,415/) and Valves in Kit form (Rs. 1,44,93,984) to its AE in USA viz. Flow Serve Sulphur Spring (Flow Serve) by holding the benchmarking of international transaction....
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.... only to its AE i.e. L & T LLC, USA but also to others i.e. non AE entities in USA. The CIT (A) found that in some cases the respondent charged higher rate from its AE and in other cases lesser than those charged to non AE's. However he was of the view that the AE and non AE transactions are to be separately aggregated, then the difference on aggregation of transactions is to be determined to decide the ALP. The CIT (A) found that if the above exercise is done then the difference between ALP and the price at which it sold to AE was less than 5% as provided in Section 92C of the Act. Therefore, the addition on account of sales of valves to L & T LLC, USA made by the Assessing Officer was deleted. (c) Being aggrieved with the ord....
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....ive rise to any substantial question of law. Thus, not entertained. 5. Re:Question No. B (a) During the assessment proceedings on a reference to the TPO, it was noted that the respondent had exported finished valves and valves in kit form to its AE i.e. Flow Serve Sulphur Spring (Flow Serve) USA and also its group companies across the globe. It was also found that finished valves and kits supplied to Flow Serve was unique in nature. It was found that sales to Flow Serve U.S.A. were at a loss. The respondent had during the proceedings before TPO placed reliance upon two comparable companies viz. BHEL & KSB Pumps to determine the transfer pricing adjustment at cost of production plus 15%. However, the TPO found that supply of valv....
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....arts of the world. The Tribunal held that in terms of the provision of the Act the comparison to determine the ALP cannot be done by comparing the prices charged to other AE's i.e. controlled transactions. The Tribunal further held that the transfer pricing adjustment of transactions with AEs in USA has to be done/arrived at by making comparisons with uncontrolled parties in USA. In the aforesaid circumstances, impugned order of the Tribunal dismissed the revenue's appeal, upholding the CIT (A)'s order. (d) We note that Chapter X of the Act is a special provision relating to avoidance of tax. Section 92 deals with computation of income from international transaction having regard to ALP. It provides any income arising f....