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In view of above mentioned facts and circumstances of the case your honour is requested to allow the grounds of appeal no. 3 to 7 of the appellant company."

22.2 The assessee also furnished two more sets of evidence before the Ld. CIT(A) and contended that in view of the inadequacy of CUP data as held by the TPO and also due to the fact that quotation submitted were treated as unacceptable, either Profit Split Method (PSM) or Transactional Net Margin Method (TNMM) be accepted the additional evidences. The assessee submitted to the Ld. CIT(A) as under:

Profit split method: This method, is used by the appellant company now, because the independent enquiry conducted by Id. TPO to verify the independent rates of product in which international transaction was carried out by appellant company, has resulted, in blank as various pharma company from whom enquiry is conducted by Id TPO has denied, having dealt with the items in. which international transaction took place between appellant company and its AE. In this method we enclosing herewith following documents:-

"5. The assessee was also asked vide letter dated 10.02.12 to establish how profit split method (PSM) is a suitable method in this case as normally PSM is the most appropriate method in cases involving complex transactions wherein both parties have complex functions and contribute with intangibles. The assessee has replied vide letter dated 21.02.12 that PSM is the most appropriate method in complex transactions, however, it cannot be said that it cannot be used in other cases. In absence of proper data for other methods, the use of PSM may be justified. However, it is seen that the assessee has applied PSM in a strange manner. It has recalculated the net profit margin % for the units in India and Sri Lanka under hypothetical tax conditions and. compared the same to justify the net profit margin % of the Indian unit. This is not the correct way of applying PSM. In PSM, global profit on a set of transactions are determined and then apportioned on the basis of FAR analysis of the assessee and AK. In this case it is seen that the Sri Lnakan unit (M/s Chempharma) has sold its finished products of Rs. 69.54 crores out of total sales ofRs.79.96 crores :he Indian unit. Even the balance has been sold to M/s Chemical Resources which had in turn sold to the Indian unit and which was attempted as a proof of " by the assessee but was foiled by the investigations made by the TPO as described in his order. So the entire sales can be said to have been made by the Sri Lankan unit to the Indian unit. These purchases are about 50% of the total raw materials of Rs. 155.03 crores consumed by the Indian unit. Since, the same form about 50% of the total transactions of the Indian unit about 50%) of the profit of the Indian unit can be said to be arising out of trie transactions with the Sn Lankan unit. This view is being taken also in view of the fact that the value addition as seen from the %o of manufacturing expenses to sales is much more in case of Indian unit (4.60%)) than for Sri Lankan unit (1.56%). Hence, consolidated profit on account of transactions which are integrated transactions involving transactions botli in Indian unit and in Sri Lankan unit becomes Consolidated profit on account of integrated 50% profit of India unit from operating activities transactions = + 100% profit of Sri Lankan unit from operating activities.

26. We have considered the submissions of both the parties and perused the material available on the record. In the present case it is noticed that the assessee entered into an International Transactions with its AE, M/s Chempharma Pvt. Ltd. a Sri Lankan Subsidiary of the assessee. The assessee was required to determine the Arm's Length Price (ALP) as per the Transfer Pricing provisions of the Act. The assessee chose CUP as a most appropriate method and concluded that the International Transaction entered by it with its AE was at arm's length. However the TPO did not agree with explanation of the assessee and made an adjustment of Rs. 3,52,96,048/-. The TPO did not accept this explanation of the assessee that the purchases from the AE were at lower rate in comparison to the purchases from uncontrolled parties. When the matter was taken to the Ld. CIT(A), he pointed out defects in the bench marking of prices relating to the transaction done by the assessee company with its AE by using the CUP method. The Ld. CIT(A) also pointed out defects in the order of the TPO, due to number of reasons stated in the impugned order which have been discussed in the former part of this order, for the cost of repetition the same is not reproduced herein. The assessee in order to choose reasonable basis of comparing transactions, furnished additional evidences before the Ld. CIT(A) in the form of fluctuations in the price of the material purchsed i.e. MICA, to supplement its CUP Data and the calculation of ALP. The assessee proposed two additional method being Profit Split Method(PSM) and Transactional Net Margin Method(TNMM), the assessee furnished the relevant additional data in the form of financial statements of the comparable companies. The Ld. CIT(A) forwarded the submission of the assessee to the TPO for her examination and comments. The TPO during the remand proceedings called for additional informations from the assessee which were duly provided as had been mentioned in para 5.11 of the impugned order. The Ld. CIT(A) categorically stated that the TPO in his remand report did not raise any objection on the acceptability of additional evidence furnished by the assessee and had provided her comments on merits.