Asstt. CIT v. Mss India (P) Ltd.

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The Tax PublishersITA No. 393 (Pn) of 2007 2009 TaxPub(DT) 1766 (Pune-Trib) : (2009) 030 (II) ITCL 0037 : (2009) 123 TTJ 0657 : (2009) 032 SOT 0132 : (2009) 025 DTR 0001 Asstt. CIT v. Mss India (P) Ltd. INCOME TAX ACT, 1961 Transfer pricing - Computation of ALP -Basis of selecting comparables *Held:* Assessee had consistently followed one of standard methods of determining arms length price [ALP]; such a method cannot be rejected in preference over transactional profit methods merely because a method of ALP determination was presents complexity in approach. Under provisions of transfer pricing regulations, it required that transactions should be entered into at an arms length price, as close to independent transactions between unrelated transactions as possible, but there was no such requirement that associated enterprise (AE) must enter into transactions in such a manner as to ensure that AEs were allowed to make a reasonable profit margin. Income-tax Act, 1961, Section 92C, read with rules 10B and 10C of Income-tax Rules, 1962 A.Y. : 2003-04 Decision: In favour of assessee. Case Law Analysis:Aztec Software & Technology Services Ltd. v. Asstt. CIT [2007] 107 ITD 141 (Bang.) (SB) (para 16). INCOME TAX ACT, 1961 Appeal (Tribunal) - Order of Tribunal -Binding *Held:* Decision of Division Bench, which was directly contrary to decision made by Larger Bench, cannot be said to have any binding force. Income-tax Act, 1961, Section 254 A.Y. : 2003-04 Decision: In favour of assessee. SUBSCRIBE FOR FULL CONTENT

The Tax PublishersITA No. 393 (Pn) of 2007
2009 TaxPub(DT) 1766 (Pune-Trib) : (2009) 030 (II) ITCL 0037 : (2009) 123 TTJ 0657 : (2009) 032 SOT 0132 : (2009) 025 DTR 0001

Asstt. CIT v. Mss India (P) Ltd.

INCOME TAX ACT, 1961

Transfer pricing - Computation of ALP -Basis of selecting comparables

Held: Assessee had consistently followed one of standard methods of determining arms length price [ALP]; such a method cannot be rejected in preference over transactional profit methods merely because a method of ALP determination was presents complexity in approach. Under provisions of transfer pricing regulations, it required that transactions should be entered into at an arms length price, as close to independent transactions between unrelated transactions as possible, but there was no such requirement that associated enterprise (AE) must enter into transactions in such a manner as to ensure that AEs were allowed to make a reasonable profit margin.

Income-tax Act, 1961, Section 92C, read with rules 10B and 10C of Income-tax Rules, 1962

A.Y. : 2003-04
Decision: In favour of assessee.

Case Law Analysis:Aztec Software & Technology Services Ltd. v. Asstt. CIT [2007] 107 ITD 141 (Bang.) (SB) (para 16).

INCOME TAX ACT, 1961

Appeal (Tribunal) - Order of Tribunal -Binding

Held: Decision of Division Bench, which was directly contrary to decision made by Larger Bench, cannot be said to have any binding force.

Income-tax Act, 1961, Section 254

A.Y. : 2003-04
Decision: In favour of assessee.