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of the Compaq U.S. standard cost. In addition, the purchases
occurred in the regular course of business and were substantial
in both frequency and amount. See Seagate Tech., Inc. & Consol.
Subs. v. Commissioner, supra at 188 (rejecting CUP comprised of
single transaction). Although these transactions were not
identical to the controlled transactions involving Compaq Asia,
we conclude that they are sufficiently similar to provide a
reliable measure of an arm's-length result. Thus, the purchases
from unrelated subcontractors identified by petitioner qualify as
comparable uncontrolled sales for purposes of application of the
CUP method.
Compaq U.S. purchases of PCA's from unrelated
subcontractors, however, differ in some respects from the PCA
purchases from Compaq Asia. Accordingly, within the context of
section 1.482-2A(e)(2)(ii), Income Tax Regs., and the particular
facts in this case, the specific differences between the Compaq
U.S. purchase of PCA's from Compaq Asia and unrelated
subcontractors must be examined to determine "Whether and to what
extent differences in the various properties and circumstances
affect price."
As expressly authorized by section 1.482-2A(e)(1)(iv),
Income Tax Regs., Compaq U.S. segregated the PCA purchases from
Compaq Asia and unrelated subcontractors into different
categories of PCA's. Within each category, the PCA's had only
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