Section 92C(1) provides that ALP of international transaction and SDT shall be determined by adopting “MAM”, having regard to the nature of transaction or class of transaction or class of associated persons or functions performed by such persons or such other relevant factors as the Board may prescribed. Rule 10C lays down the guiding principles […]
Very apt observations of Tribunal on selection of MAM
Fortune Infotech Ltd. v ACIT [2016] 66 taxmann.com 92 (Ahmedabad – Trib.) The Tribunal observed that “A method selected for benchmarking must be a permissible method to be included in the consideration zone, but even it’s presence in the consideration zone is not good enough to justify its application for benchmarking the international transactions on […]
WHETHER TRANSFER PRICING LAW IS APPLICABLE IF NONE OF THE METHODS CAN BE APPLIED
The ALP has to be computed as per section 92C and Rules thereunder. This is a statutory mandate. An interesting issue arises as to whether the taxpayer can argue that it is impossible to compute ALP as per any of the prescribed methods and therefore transfer pricing provisions are not applicable to it or in […]
COMPUTATION OF ALP – DEVIATIONS FROM PRESCRIBED METHODOLOGY PERMITTED
Section 92C(1) provides that ALP of international transaction and SDT shall be determined by adopting “MAM”. Sub-section (2) provides that most appropriate method shall be applied, for determination of ALP, in the manner prescribed. Rule 10B lays down the methodology for computation of ALP for each of the method. The selection of one method as […]
INTEL ASIA ELECTRONICS INC v ADIT [2011] 9 taxmann.com 197 (Bang.), [2011] 140 TTJ (Bang.) 513
In the context of sale of the taxpayer’s PE as a ‘going concern’ to the AE and where no similar transactions in an uncontrolled situation to compare are available, The ITAT observed that the valuation determined by the registered valuer could be the most appropriate means under the CUP method. However, the ITAT finally directed […]
KODAK INDIA PVT LTD v ACIT (2013) 155 TTJ 697 (Mum ITAT)
The Tribunal rejected the action of the TPO of computing ALP by allocating the consideration received on sale of business on the basis of revenue ratio on the ground that it is not prescribed method and no seventh method could be adopted by the TPO. Facts The taxpayer sold its medical – imaging business to […]
CIT v CA COMPUTER ASSOCIATES INDIA PVT LTD (2013) 351 ITR 69 (Bom)
It was held that the ALP should be determined as per the procedure prescribed. Any deviation from the prescribed procedure cannot be sustained. Facts The taxpayer was engaged in the business of licensing mainframe, midrange and system infrastructure software products of CA Management Inc. of the USA. The taxpayer had set-up a Technical Support Centre […]
COMPARABLES FOR ITES FOR AY 2008-09
LIONBRIDGE TECHNOLOGIES PVT LTD VS ITO [2014] 48 TAXMANN.COM 46 (MUMBAI – TRIB.) – The Tribunal held that comparables providing KPO services like engineering or data analysis/processing etc cannot be comparable with the assessee engaged in providing low end back-office operations. The assessee was engaged in providing low end back-office support services. During AY 2007-08, […]
BRIGAE CORPORATION INDIA (P.) LTD vs ACIT [2014] 48 taxmann.com 176 (Chennai- Trib.)
Facts: For AY 2007-08, the Assessee was engaged in the business of providing customer supporting services in the form of email support, voice support & chatting and financial information support for customers identified by the AEs. The TPO selected M/s.Eclerx Services Ltd as a comparable. The CIT(A) observed that Eclerx has an operating profit of […]
PIAGIO VEHICLE P. LTD v DCIT TS-534-ITAT-2012-TP
The ITAT held that the margin earned from sale of spare parts for after sale service cannot be compared with margin earned from sale of components sourced from India and sold to AEs. The taxpayer had exported parts and components to AE as well as non-AE. The TPO adopted internal TNMM as against external TNMM […]