Tribunal held that in respect of exported the carpets to its foreign associated enterprises as well as to the other unrelated parties the vast variation of the rates of different variety of the carpets, designs and patterns made it difficult to compare the average price computed in terms of the arithmetic mean of all the transactions with that of the carpets sold to non-associated enterprises. Therefore, the average method adopted by the assessee in working out the arm’s length price under the comparable uncontrolled price did not give the correct results of the arm’s length price. These transactions could not be simply aggregated or clubbed together for evaluation under the transfer pricing regulations. A weighted average of price rate of the transactions with the associated enterprises as well as the non-associated enterprises would mitigate the scope of any variation or difference in the working out of the sale price of the international transactions as well as the uncontrolled/unrelated price being arm’s length price. The matter was remanded to the Assessing Officer to carry out a fresh exercise of determining the arm’s length price as well as the price of the international transaction by using a weighted average instead of a simple average of all the transactions entered into by the assessee with the associated enterprises as well as all the transactions of sale of carpets to the non-associated enterprises. Further once the comparable uncontrolled price taken was more than one the benefit of the second proviso to section 92C(2) had to be allowed and thereby if the price of the international transaction was within the tolerance range of ± 5 per cent. of the arm’s length price no adjustment was called for. As regards sale proceeds to be realised from the associated enterprises were in foreign currency, instead of applying the prime lending rate as the arm’s length price, interest at the LIBOR shall be considered as the arm’s length interest. When the credit period allowed by the assessee was more than the normal period the financial effect of the credit allowed to the associated enterprises had to be taken and considered as part of the sales made to the associated enterprises and not as an independent international transaction.  The effect of the exchange gain or loss had to be given in computing of arm’s length price being the part of sale proceeds as well as comparable price. (AY. 2008-09 to 2010-11)