The Tax Publishers2021 TaxPub(DT) 0019 (Bang-Trib)

INCOME TAX ACT, 1961

Section 143(3)

TPO determined ALP of international transaction at Nil, without carrying out any FAR analysis of intra-group services. This approach of TPO was not acceptable, as once a transaction had been categorised as independent international transaction, it was necessary to determine ALP of such transaction. TPO couldnot consider ALP at 'NIL' and value of transaction was to be computed as per law. Therefore, TPO was directed to determine ALP of services based on documents submitted by assessee by determining 'most appropriate method' and comparability analysis.

Transfer pricing - Determination of ALP - Management Service charges -

TPO disputed payments made by assessee to AE abroad towards management fees and determined ALP at NIL by applying CUP, vis-a-vis, ALP determined by assessee at aggregate level by using TNMM, Holding that assessee did not obtain any benefit out of such services and that such services provided by AE were not required as assessee had failed to provide evidence regarding receipt of services, alleged to be rendered by AE, necessitating any payment. Held: TPO determined ALP of international transaction at Nil, without carrying out any FAR analysis of intra-group services. This approach of TPO was not acceptable, as once a transaction had been categorised as independent international transaction, it was necessary to determine ALP of such transaction. TPO couldnot consider ALP at 'NIL' and value of transaction was to be computed as per law. Therefore, TPO was directed to determine ALP of services based on documents submitted by assessee by determining 'most appropriate method' and comparability analysis.

Relied:Delloite Consulting India (P.) Ltd. v. Dy. CIT/ITO (2012) 137 ITD 21 (Trib) : 22 Taxmann.com 107 (Mum)(Mag) : 2012 TaxPub(DT) 2512 (Mum-Trib), and CIT v. M/s. Cushman & Wakefield (India) (P) Ltd. (2014) 46 taxmann.com 317 (Del)

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2009-10



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