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If you are implementing this in OSB:
Then in your XQuery you can use fn-bea:execute-sql() function to query the DB for existence of current ITEM ID within a if-else block and write transform logic in XQ accordingly.
If you are implementing this in SOA Suite:
Then in your XSLT you can use oraext:lookup-table() function within your XSLT to check the existence of current ITEM ID within a If node and write transform logic in XSLT accordingly.