Search Results For: Arms length price


Fresenius Kabi India Private Limited vs. DCIT (ITAT Pune)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: , , ,
COUNSEL:
DATE: June 16, 2017 (Date of pronouncement)
DATE: September 12, 2017 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
Transfer Pricing: In the case of an assessee engaged in distribution activity there is no value addition to the product in question even if the selling and marketing expenses are borne by the assessee. Accordingly, the Resale Price Method is the most appropriate method for bench marking the transaction and determining whether it is at arms' length. The TPO is not entitled to thrust TNMM to evaluate the transaction

It is settled legal position at the various Benches of the Tribunal that, in case of distribution activity, even when there are selling and marketing expenses are borne by the assessee, there cannot be any value addition to the product in question. In such cases, Resale Price Method is the most appropriate one and accordingly we reverse the decision given by the AO/TPO/DRP in thrusting on the assessee the TNM method to the transaction under consideration

Zee Entertainment Enterprises Ltd vs. ACIT (ITAT Mumbai)

COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS: , , , ,
COUNSEL:
DATE: May 5, 2017 (Date of pronouncement)
DATE: May 11, 2017 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
Transfer Pricing: Law explained as to when the “Resale Price Method” (RPM) can be used with respect to related parties under Rule 10B (1)(b) + Law on determining arm’s length rate of the corporate guarantee commission/fee explained

The Transfer Pricing Officer has selected RPM as most appropriate method for determining the arm’s length price of the transaction of sale of programmes and film rights to ATL in contrast to the TNM method selected by the assessee. The first controversy is as to whether the Transfer Pricing Officer was justified in selecting the RPM as most appropriate method. Section 92(1) of the Act provides that the arm’s length price in relation to the international transaction shall be determined by any of the methods prescribed therein, being the most appropriate method. Notably, the phraseology of section 92C(1) of the Act makes it clear that the selection of the most appropriate method is to be made “having regard to the nature of transaction or class of transaction or class of associated persons or functions performed by such persons or such other relevant factors………………..”. Further, Rule 10B of the Rules enumerates the various methods to determine the arm’s length price of an international transaction and for the present purpose, what is relevant is clause(b) of Rule 10B(1) of the Rules, which prescribes the manner in which the RPM is to be effectuated

CIT v. Thyssen Krupp (Bombay High Court)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL: ,
DATE: December 2, 2015 (Date of pronouncement)
DATE: December 21, 2015 (Date of publication)
AY: 2007-08
FILE: Click here to view full post with file download link
CITATION:
Transfer Pricing: An adjustment with respect to transfer pricing has to be confined to transactions with Associated Enterprises and cannot be made with respect to transactions with unrelated third parties

In terms of Chapter X of the Act, re-determination of the consideration is to be done only with regard to income arising from International Transactions on determination of ALP. The adjustment which is mandated is only in respect of International Transaction and not transactions entered into by assessee with independent unrelated third parties. This is particularly so as there is no issue of avoidance of tax requiring adjustment in the valuation in respect of transactions entered into with independent third parties. The adjustment as proposed by the Revenue if allowed would result in increasing the profit in respect of transactions entered into with non-AE. This adjustment is beyond the scope and ambit of Chapter X of the Act

Knorr-Bremse India Pvt. Ltd vs. ACIT (P&H High Court)

COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: November 6, 2015 (Date of pronouncement)
DATE: November 23, 2015 (Date of publication)
AY: 2007-08
FILE: Click here to view full post with file download link
CITATION:
Rule 10A(d): Law on when multiple transactions can be regarded as a single composite transaction for determining arm’s length price explained. Fact that a transaction results in a profit or a loss has no bearing on whether it is at arm’s length price

The answer to the issue whether a transaction is at an arm’s length price or not is not dependent on whether the transaction results in an increase in the assessee’s profit. A view to the contrary would cause considerable confusion and lead to arbitrary, if not illogical, results. A view to the contrary would then raise a question as to the extent of profitability necessary for an assessee to establish that the transaction was at an arm’s length price. A further question that may arise is whether the arm’s length price is to be determined in proportion to the extent of profit. Thus, while profit may reflect upon the genuineness of an assessee’s claim, it is not determinative of the same

R.A.K. Ceramics India Pvt. Ltd vs. DCIT (ITAT Hyderabad)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: February 4, 2015 (Date of pronouncement)
DATE: February 9, 2015 (Date of publication)
AY: 2010-11
FILE: Click here to view full post with file download link
CITATION:
TPO/ DRP's action of reducing the quantum of royalty paid to AE by applying the "benefit test" is surprising and improper

It is an accepted principle of law that TPO has to determine the ALP by adopting any one of the methods prescribed u/s 92C of the Act. Mode and manner of computation of ALP under different methods have been laid down in rule 10B. Even, assuming that TPO has followed CUP method for determining ALP of royalty payment, as held by ld. DRP, it needs to be examined if it is strictly in compliance with statutory provisions. Rule 10B(1)(a) lays down the procedure for determining ALP under CUP method

Varroc Engineering Pvt. Ltd vs. ACIT (ITAT Pune)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: December 30, 2014 (Date of pronouncement)
DATE: January 8, 2015 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
Transfer Pricing: ALP of interest on funds advanced to AEs has to computed on LIBOR and not as per domestic Prime Lending Rate (PLR)

While benchmarking the international transactions what has to be seen is the comparison between related transactions i.e. where the assessee has advanced money to its associated enterprises and charged interest then the said transaction is to be compared with a transaction as to what rate the assessee would have charged, if it had extended the loan to the third party in foreign country. Once there is a transaction between the assessee and its associated enterprises in foreign currency, then the transaction would have to be looked upon by applying the commercial principles with regard to the international transactions. In that case, the international rates fixed being LIBOR+ rates would have an application and the domestic prime lending rates would not be applicable

DCIT vs. Alcatel India Limited (ITAT Delhi)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: November 25, 2014 (Date of pronouncement)
DATE: December 3, 2014 (Date of publication)
AY: 2003-04
FILE: Click here to view full post with file download link
CITATION:
Transfer Pricing: ALP adjustments can only be made in respect of international transactions with the AEs and cannot extend to the transactions with non AEs

It is well settled legal position that the ALP adjustments can only be made in respect of international transactions with the AEs and cannot extend to the transactions with non AEs. There are large number decisions of the coordinate benches,

Toyota Kirloskar Auto Parts Pvt. Ltd vs. ACIT (ITAT Bangalore)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: November 21, 2014 (Date of pronouncement)
DATE: December 3, 2014 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
Transfer Pricing: Law on aggregation of several international transactions to determine the Arms' Length Price explained

1) Whether the payment of royalty is interlinked and interconnected with the other international transactions of the assessee with its AE’s? 2) Where different international transactions with the AE are interconnected and interlinked, whether the aggregation of the transactions is

ADIT vs. M/s I. M. Technologies (ITAT Delhi)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: November 28, 2014 (Date of pronouncement)
DATE: December 1, 2014 (Date of publication)
AY: 2006-07
FILE: Click here to view full post with file download link
CITATION:
Transfer Pricing: Updated information not available at the time of the TP study but available at the stage of assessment has to be considered by AO

In the light of the facts on record, on a consideration of the same we are of the view that the reliance placed on the data available in the public domain at the time of the assessment proceedings which was

Nokia India (P) Ltd vs. DCIT (ITAT Delhi)

COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , , ,
COUNSEL:
DATE: October 31, 2014 (Date of pronouncement)
DATE: November 3, 2014 (Date of publication)
AY: 2002-03
FILE: Click here to view full post with file download link
CITATION:
(i) Method of applying Resale Price Method (RPM) method, (ii) high advertisement expenses has no bearing on the RPM, (iii) comparables with more than 25% of related party transactions (RPTs) have to be excluded, (iv) transactions which do not impact the profitability should be excluded from the formula, (v) potentially comparable companies cannot be expelled only on the ground of high or low turnover

(i) The assessee simply purchased mobile phones and accessories from Nokia group companies situated outside India and resold the same as such without any further value addition, mainly, to HCL Infosystems in India. Since the goods imported from the foreign

Top