The TPO made adjustment for payments made towards intra-group services and payment made towards import of capital goods amounting to Rs.12,40,40,466/-, after accepting ALP of all other transactions under TNMM. The assessee had clubbed all the international transactions together and adopted TNMM for benchmarking. The Tribunal held that the TPO was not justified in selectively […]
Undercarriage and Tractor Parts Pvt Ltd v DRP [TS-554-HC-2023(BOM)-TP]
Facts of the Case Date Events 30.10.2018 The TPO passed proposing adjustment of Rs 11.92 crores 03.12.2018 Draft Assessment order was passed by the AO 14.12.2018 The Assessee filed a Letter before the AO he it in the process of filing objections before DRP and requested the AO not to pass the final assessment order. […]
ITAT held that no mark-up required for actual costs allocated to eligible unit absent service element
Case Name: Finolex Cables Ltd [TS-319-ITAT-2023(PUN)-TP] Facts: The assessee was engaged in manufacturing and sales of electrical cables, optical fiber cables, lamps and switches etc. For AY 2013-14, the assessee allocated expenses to its FCL-Roorkee Unit (eligible 80-IC unit) and explained that these expenses were allocated on turnover basis except the derivative losses and interest, […]
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 […]
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 […]