Additions to TP based on CUP ignoring geographical variations - not questioning assessee's application of Resale price method

Facts:

Assessee imported 8k Sim cards from its AE in USA and in Hong Kong and was reselling the same. They adopted resale price method (RPM) as the right benchmarking method for TP purposes. TPO did not concur with the RPM benchmarking and made additions to income. On appeal the CIT(A) dropped part of the TP additions alleging that Comparable Uncontrollable Price (CUP) method was the right method to be adopted besides giving reasoning for dropping the additions and benchmarking by referring to technical aspects, product/technology obsolescence and also holding that geographically the pricing cannot be different. Aggrieved by this revenue went in appeal -

Held in favour of the revenue that the TP additions that were dropped by the CIT(A) were done incorrectly and they were reinstated.

Ed. Note: The decision is a classic example depicting the saturated maturity of Indian TP authorities. The SC has recently held in SAP labs case that the issues of ALP computation may be questions of law if the procedure as per law is not adequately followed or are found perverse. It is not known whether this decision is one such fit case for appeal to high court on fact of law and not on facts of finding.

Case: Asstt. CIT v. Thales DIS India (P) Ltd. 2023 TaxPub(DT) 2560 (Del-Trib)