Where is TDC?
 

Installing timing belt, actually a whole head, on a 2002 V70XC. Simple question, do I align the crankshaft pullet marks up with the front cover OR do I set cylinder #1 to TDC - they differ by about one crankshaft pulley tooth.

It's simple enough to take out the spark plug, insert a rod/pin with a dial indicator at the other end to determine the true TDC, which I did.
Photo shows where my timing marks line up set to TDC as described:

Its close and I want to make sure I get everything aligned correctly the 1st time...

I'm 45/65 on this one leaning towards what I know is TDC. Hopefully someone has seen this and can tell me what to do.