B. Ramakotaiah, Accountant Member - This is an assessee's appeal against the order of Addl.CIT, Range-3, Visakhapatnam passed under section 143(3) read with section 144C(5) of the I.T. Act, 1961 consequent to the directions of Disputes Resolution panel (in short "DRP"), Bangalore.

1.1. The issue in this appeal is with reference to the transfer pricing adjustment of Rs.5,45,18,174/- made by the A.O. on the calculations provided by the DRP in respect of international transactions of purchase of raw materials of Rs.17.24 crores from Associated Enterprise (AE).

2. We have heard learned Counsel Mr. PVSS Prasad and I. Kama Sastry and the learned CIT D.R. Mr. KVN Charya. We have also perused the paper books placed on record along with the relevant case law.

3. Briefly stated, the assessee company registered under the Companies Act, 1956 and is 100% owned by M/s. KTC Korea. The company is primarily engaged in the activity of manufacture of Roasted Molybdenum Concentrate Oxide and trade of high carbon ferro-chrome. Assessee filed return of income for the assessment year 2007-2008 admitting loss of Rs.1,50,18,120/-. Since assessee had international transactions with AE for purchase of raw