|CORAM:||George George K (JM), R. S. Syal (AM)|
|CATCH WORDS:||CUP, Most Appropriate Method, TNMM|
|COUNSEL:||V. P. Gupta|
|DATE:||October 31, 2014 (Date of pronouncement)|
|DATE:||November 4, 2014 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|If assessee has followed CUP method, it cannot argue at the appellate stage that TNMM should be followed even if TPO has for later years accepted TNMM as the Most Appropriate Method|
(i) It is observed that the assessee applied CUP as the most appropriate method for benchmarking the international transactions undertaken by it. The assessee did not dispute before the TPO that the CUP was the most appropriate method. However, it was only during the course of first appellate proceedings that the assessee came out with an additional ground contending that the most appropriate method was TNMM and the same should be applied. Even in AY 2002-03, the assessee applied the CUP method for benchmarking its international transactions.
(ii) We do not find any force in the argument of the ld. AR that simply because the TPO has applied TNMM for the A.Ys 2007-08 and 2008-09 and hence the application of the same by the CIT(A) be upheld. This factor, though significant, but is not conclusive. What persuaded the TPO to observe departure in these two later years from the consistent stand taken by him in the immediately preceding four years up to A.Y. 2006-07 in following the CUP method, is not available on record. There may have been some change in the factual position necessitating the adoption of TNMM in these later years. Further, the mere fact that the TPO adopted TNMM in a later year can be no ground to argue before the tribunal that the same method be followed in a preceding year, which stand has been specifically rejected by him in the instant years. As such, we cannot uphold the application of TNMM on this reason alone, more specifically, when in the immediately preceding year, where the facts are admittedly similar, the tribunal has restored the matter to the TPO for de novo adjudication.