Very apt observations of Tribunal on selection of MAM

Fortune Infotech Ltd. v ACIT [2016] 66 92 (Ahmedabad – Trib.)

The Tribunal observed that “A method selected for benchmarking must be a permissible method to be included in the consideration zone, but even it’s presence in the consideration zone is not good enough to justify its application for benchmarking the international transactions on the facts of a particular case because such a method has to be not only a permissible method but also most appropriate method having regard to all the material factors, including availability, coverage and reliability of data necessary for application of such a method. The method selected for benchmarking must not only be a permissible method but it also be the ‘most appropriate method’ on the facts and circumstances of that case and vis-à-vis the other methods which can be applied on the facts of that case. The selection of most appropriate method is not simply deciding a question as to what is permissible and what is not permissible, because, as is elementary, everything permissible in law, as indeed in all walks of life, is not necessarily the most appropriate thing as well.”

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