The issue for consideration was whether Motilal Oswal Investment Advisor, engaged in merchant banking activity can be compared with Assessee engaged in investment advisory services. Facts: For AY 2009-10, the assessee rendered investment advisory services to its AE. The assessee applied TNMM as the MAM and arrived at mean margin of 18.60% (PLI=OP/OR) by selecting […]
CIT V. MIRZA INTERNATIONAL LTD [2014] 51 TAXMANN.COM 21 (ALLAHABAD HC)
The Issue for consideration was whether there can be difference in treatment of export incentives while computing margins of comparables and Assessee The assessee made export sales to its AE in UK for AY 2008-2009. The TPO passed an order making TP adjustments. The CIT(A) observed that the TPO has computed the operating margin of […]
AGILENT TECHNOLOGIES INTERNATIONAL (P.) LTD. V. DCIT [2014] 52 TAXMANN.COM 85 (DELHI – TRIB.)
The issue before the ITAT was whether claim of working capital adjustment can be rejected on the ground that the assessee is not engaged in manufacturers/traders. Facts For AY 2006-2007, a TP adjustment was proposed by the TPO in respect of Software development segment and IT enabled services (ITES) segment. The Assessee had claimed that […]
PCIT VS. LUWA INDIA PVT. LTD. [TS-281-HC-2021 (KAR HC)-TP]
While exercising jurisdiction u/s 92CA(3), the TPO can only determine the ALP of an international transaction and cannot examine the allowability of the claim by applying the benefit test or the conditions as provided under Section 37(1) of the Act Facts The assessee, was engaged in the business of manufacturing textiles machines for textile manufacturers […]
TP ADJUSTMENT FOR CORPORATE GUARANTEEE ONLY TO THE EXTENT LOAN FACILITY AVAILED – ASSOCIATED CAPSULES CASE
Associated Capsules Pvt. Ltd. v ACIT [2020] 121 taxmann.com 103 (Mumbai – Trib.) Facts The assessee is engaged in the business of manufacturing empty hard gelatine capsules. The assessee provided Corporate Guarantee of 2.4 million Euros (Equivalent to Rs. 15.19 crores) to its Croatian AE. The assessee did not make any adjustment on account of […]
COST OF TERMINATION OF PROPERTY PURCHASE AGREEMENT – WHETHER OPERATING OR NON-OPERATING FOR PLI COMPUTATION
Rule 10B of Income Tax Rules provides methodology for computation of ALP. Under TNMM, ‘net profit’ is used as benchmark for ALP computation. Rule 10B(1)(e)(i) provides for considering “net profit margin realised by the enterprise from an international transaction or SDT entered into with an associated enterprise”. Rule 10B(1)(e)(ii) provides for computation of ‘net profit […]
IMPACT OF AUDITOR QUALIFICATION ON OPERATING MARGIN COMPUTATION
Rule 10B of Income Tax Rules provides methodology for computation of ALP. Under TNMM, ‘net profit’ is used as benchmark for ALP computation. Rule 10B(1)(e)(i) provides for considering “net profit margin realised by the enterprise from an international transaction or SDT entered into with an associated enterprise”. Rule 10B(1)(e)(ii) provides for computation of ‘net profit […]
EXPORT INCENTIVES AND SUBSIDIES – WHETHER OPERATING OR NON-OPERATING FOR PLI COMPUTATION
Rule 10B of Income Tax Rules provides methodology for computation of ALP. Under TNMM, ‘net profit’ is used as benchmark for ALP computation. Rule 10B(1)(e)(i) provides for considering “net profit margin realised by the enterprise from an international transaction or SDT entered into with an associated enterprise”. Rule 10B(1)(e)(ii) provides for computation of ‘net profit […]
DONATION – WHETHER OPERATING OR NON-OPERATING FOR PLI COMPUTATION
Rule 10B of Income Tax Rules provides methodology for computation of ALP. Under TNMM, ‘net profit’ is used as benchmark for ALP computation. Rule 10B(1)(e)(i) provides for considering “net profit margin realised by the enterprise from an international transaction or SDT entered into with an associated enterprise”. Rule 10B(1)(e)(ii) provides for computation of ‘net profit […]
WHETHER EXPENSES DISALLOWED BY AO CAN BE CLAIMED AS NON-OPERATING IN NATURE FOR OPERATING MARGIN COMPUTATION
Rule 10B of Income Tax Rules provides methodology for computation of ALP. Under TNMM, ‘net profit’ is used as benchmark for ALP computation. During the assessment, the AO may disallow expenditure incurred by the taxpayer on various grounds like they are personal in nature, they are bogus expenditure, etc. The disallowance of the AO would […]