Dismissing the appeal of the  revenue the Court held that  the  Tribunal  is justified in holding that free on board value of  contract  cannot be  included in  operating cost and Tribunal  rightly held that the Transfer Pricing Officer had “artificially enhanced the cost base of the taxpayer and proposed a mark up of the free on board value of the goods sourced by the associated enterprises and as such this approach was not available in the transactional net margin method under rule 10B(1)(e). (AY. 2007-08, 2008-09, 2009-10)