1501, One Indiabulls Room No.461,Aayakar Centre, Tower2, Wing Bhawan, M.K. Road B, 15 t h Floor Mumbai 400 020. Jupiter Mills, Senapati Bapat Road Elphinstone MUMBAI400 013. ᭭थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AABCH 7319 B (अपीलाथᱮ /Appellant) ... (ᮧ᭜यथᱮ / Respondent) अपीलाथᱮ ओर से / Shri Ajit Kumar jain Appellant by : Shri Jitendra Jain Ms. Astha Bhatia and Ms. Radhika Thakkar ᮧ᭜यथᱮ कᳱ ओर से/ Shri K.C.P Patnayak Respondent by : सुनवाई कᳱ तारीख / Date of 03/12/2014 Hearing : घोषणा कᳱ तारीख /Date of 14/01/2015 Pronouncement : आदेश / O R D E R PER VIJAY PAL RAO, JM: These two appeals by the assessee are directed against the assessment orders passed u/s. 144C(13) of the Income tax Act, 1961 (the Act) in pursuant to the 2 ITA Nos.7771/12 & 1374/14 Hapag Lloyd India Pvt. Ltd. directions of the DRP u/s. 144C(5) for the assessment year 200809 and 200910 respectively. 2. For the assessment year 200809 the assessee has raised various grounds. However, the only issue arising for our consideration and adjudication is whether in the facts and circumstances of the case the AO/TPO/DRP has erred in making the adjustment of Rs.18.37 crores in respect of the international transaction pertaining to the transaction of business support services. 2.1 The assessee is a 100% subsidiary of Hapag Lloyd AG (HLAG) and is a captive unit engaged in providing business support services to its parent company. The assessee company assisted in booking shipments requirements required to be moved from one location to another. The assessee has entered into a shipping agency agreement with HLAG, according to which it was appointed as the agent for HLAG. The assessee was also authorized to appoint subagents with prior written approval of HLAG. As per the agreement the assessee is entitled to receive cost plus(+) 10%. The assessee has reported the international transactions, interalia, provision of business support services of Rs.39,63,61,566/. The assessee selected TNMM as the most appropriate method and used OP/TC as PLI and work out the margin of the comparables at 8.78% in comparison to 10% of the assessee. Accordingly, the assessee claimed the price charged from the AE as armslength. The TPO noted that the assessee had paid commission of Rs.17.93 crores. The assessee was asked to give the name of earlier agent who was managing the business of HLAG in India. The agents name was searched by the TPO from the internet being German Express Shipping Agency Pvt. Ltd. (GESA). The assessee was asked to file copy of agreement between GESA and HLAG. The assessee submitted that the same is not available with the assessee as there was a fire in which the documents were destroyed. The TPO issued summons u/s.131 of the Income tax Act to GESA, to file both the agreements. The copies of the agreements were filed. Consequently, the TPO issued a showcause to the assessee as to why an internal CUP in the form of subagency between the assessee 3 ITA Nos.7771/12 & 1374/14 Hapag Lloyd India Pvt. Ltd. and GESA should not be applied for the purpose of determination of ALP. The assessee contended before the TPO that the subagency agreement cannot be applied as CUP as it was not the agreement between the GESA and HLAG. The TPO did not accept the assessee's submission and adopted CUP as most appropriate method by consid