Sale of identical goods to non-AEs cannot be taken as comparable under CUP, if there are significant differences in quantity sold, geography and cust

Court : Mumbai Bench of the Income-tax Appellate Tribunal Citation : ACIT Vs. Dufon Laboratories [2010-T11-26-ITAT-MUM-T9 Brief:- The taxpayer, a manufacturer and exporter of chemicals had more than 97.5 percent of its sales to its associated enterprise (“AE”). It benchmarked the sales to AEs under the Comparable Uncontrolled Price (“CUP”) method based on the average price charged by the AEs to the customers. The Revenue observed that the non-AEs who purchased the chemicals paid a higher price and adopted the price charged to the non-AEs as the CUP. The taxpayer stated that the AEs ope...