Tax Authorities' Transfer Pricing Adjustments Overturned; TNMM Method Upheld for Drug Sales, Cost Certificate Accepted for MCS.

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....This case deals with transfer pricing adjustments made by the tax authorities regarding international transactions involving sale of Paclitaxel, Disodium Pamidronate, and purchase of Methylene Chloride Soluble (MCS). The tax officer rejected the Transactional Net Margin Method (TNMM) adopted by the assessee and applied the Comparable Uncontrolled Price Method (CUP). The appellate authorities upheld the assessee's use of TNMM for Paclitaxel and Disodium Pamidronate, considering factors u/r 10B(2) of the Income Tax Rules. For MCS, the tax officer determined the cost price per kg as Rs. 32, while the assessee claimed Rs. 4648 per kg based on a cost certificate. The appellate authorities accepted the assessee's cost certificate in the absence o.........