In the absence of valid comparable data furnished by the assessee, the use of comparables comparable controlled transactions for the purposes of benchmarking controlled transactions is permissible

INCOME TAX APPELLATE TRIBUNAL, MUMBAI

M/s. Bayer Material Science P. Ltd.

Vs.

The Addl. Commissioner of Income-tax

ITA No. 7977/Mum/2010 : Asst. Year 2006-2007

Date of Pronouncement : 16.12.2011

O R D E R

Per R.S.Syal, AM :

This appeal by the assessee is directed against order dated 14-10-20 10 passed by the Assessing Officer u/s. 143(3) read with sec. 144C(13) of the Income-tax Act, 1961 in relation to assessment year 2006-07.

2. Ground nos. 2 to 8 (except ground nos. 4 & 7 which were not pressed by the ld. A.R.) deal with confirmation of addition of Rs.25,56,99,421/- towards transfer pricing adjustment.

3. The factual matrix of these grounds is that the assessee entered into international transactions with its Associated Enterprises (AEs). The AO referred the matter of determining the Arm’s Length Price (ALP) to the Transfer Pricing Officer (TPO). The TPO passed order u/s. 92CA(3) by making an upward adjustment to ALP of Rs.25.56 crores on account of transactions with the overseas AE. The AO proposed addition of Rs.25.56 crores in the draft assessment order. The assessee filed objections before the DRP, who rejected such objections and confirmed the stand of the Department. Based on the TPO’s order and the draft order approved by the DRP, the AO made addition of Rs.25.56 crores .