INCOME TAX ACT, 1961

Section 92C

Transfer pricing - Computation of ALP - Revenue included gross miscellaneous income of assessee as a part of commission from other liners -

DRP included gross miscellaneous income of assessee-company as a part of commission from other liners handled by it. Assessee submitted that the miscellaneous income was not derived for the liners handled by it; thus, the said receipt could not form part of the commission from the other liners. Held: It was ex facie noticed that assessee's miscellaneous income was in no way related to its international transactions with overseas AE, which would be liable to be considered for the purpose of arriving at ALP under Chapter X. There was no justification to include the same in that entire process therefore. Thus, it was appropriate to restore the instant issue to 'TPO' for his appropriate adjudication with a specific direction that in case if it was found after verification of the relevant records coming from assessee's level that the impugned income was not relevant for determination of ALP pertaining to international transactions with the AE(s), it would not be considered in the said consequential computation exercise. Further, the assessee also placed on record the order of the TPO for very next assessment year stating he excluded identical miscellaneous income for the purpose of determining the ALP adjustment regarding its international transactions. Hence, the TPO was also directed to take note of all those subsequent developments on the issue.

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2014-15

INCOME TAX ACT, 1961

Section 92C

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