- (1.) Since the controversy involved in these two appeals is identical, the same is being decided by a common judgment and order treating the Income Tax Appeal No. 07 of 2017 as the leading case. Heard Sri Shubham Agarwal, learned counsel for the department and Sri Ashish Bansal, learned counsel for the assessee.
(2.) The Income Tax Appeal No. 07 of 2017, under Section 260A of the Income-tax Act, 1961 (hereinafter referred to as the 'Act') has been filed by the department against the order of the Income Tax Appellate Tribunal dated 12.06.2015 for the assessment year 2008-09 raising following questions of law:- "A. Whether on the facts and circumstances of the case, the learned ITAT was justified in law in rejecting the appeal of the revenue without appreciating that the assessee had not furnished the details of closing stock which were attributed to the sales to the Associated Enterprises (AE) before the TPO B. Whether on the facts and circumstances of the case, the learned ITAT was justified in law in confirming the order of CIT (A) in respect of addition of Rs. 2,23,73,153/- made u/s. 92 of the I.T. Act on the basis of order of TPO, who had calculated Transfer pricing on the basis of existing data available on record"
(3.) The Tribunal has considered the matter at length. One thing which is clear from the record is that the assessee was an exporter of goods and not an importer and the consistent approach of the department was that it was adopting the CUP Method le. Comparable Uncontrolled Price Method for assessing the transaction made by exporters. The Transfer Price Officer (TPO) had wrongly used resale method (RS) for the assessee for the given aspect in question. The Tribunal therefore while examining the matter has discussed hereunder:- '4.4.1 I have perused the order of the TPO and also the submission made by the Ld. A.R. At the outset, it may be observed that the RS Method as adopted by the TPO was not legally correct as the same is applicable only for importers, whereas the present assessee is in the business of exports only. The CUP method has already been rejected by the TPO and the assessee has not disputed such rejection. I also find that in the subsequent year Le. 2008-09, the TPO has adopted TNMM as the most appropriate method to compute the ALP. Accordingly, I am of the considered view that TNMM should be adopted as the most appropriate method for computing ALP even for this year Le. A.Y. 2007-08. In this regard, the Ld. A.R. of the appellant/vide my letter dated 4.1.2013 was requested to give financial details of comparable companies (as adopted by the TPO in A.Y. 2008-09). The letter reads as under: JUDGEMENT_645_LAWS(ALL)1_2018_1.html JUDGEMENT_645_LAWS(ALL)1_2018_1.html ;