The assessee benchmarked its international transaction of rendering management consultancy services by adopting the Comparable Uncontrolled Price (CUP) Method based on comparable services rendered to unrelated parties. The Transfer Pricing Officer rejected the method and adopted external comparables under the Transactional Net Margin Method (TNMM). The Tribunal held that where reliable internal comparable uncontrolled transactions are available, they deserve preference over external comparables. As no defect was found in the assessee’s benchmarking and the Transfer Pricing Officer had proceeded on erroneous factual assumptions, the transfer pricing adjustment in respect of management consultancy services was directed to be deleted.  The Transfer Pricing Officer made adjustments in respect of licence fees, information technology cost allocation and reimbursement of expenses without determining the arm’s length price by adopting any of the methods prescribed under section 92C. The Tribunal held that determination of arm’s length price must necessarily be made by applying one of the statutory methods prescribed under the Act. As no prescribed method had been followed, the transfer pricing adjustments were liable to be deleted. While benchmarking regional co-ordination services, the Transfer Pricing Officer excluded one comparable on the ground of functional dissimilarity and substituted another. The Tribunal held that where the excluded comparable was engaged in a business similar to the comparable selected by the Transfer Pricing Officer, there was no justification for its exclusion. The Assessing Officer was directed to include the comparable in the final set of comparables.  (AY. 2011-12).