| COURT: | ITAT Mumbai |
| CORAM: | M. Balganesh (AM), Ravish Sood (JM) |
| SECTION(S): | 92C |
| GENRE: | Transfer Pricing |
| CATCH WORDS: | ALP, APA, Transfer Pricing |
| COUNSEL: | Hiten Chande, Nishant Thakkar |
| DATE: | June 11, 2019 (Date of pronouncement) |
| DATE: | February 15, 2020 (Date of publication) |
| AY: | 2014-15 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| Transfer Pricing: (i) If the "arms length‟ principle is satisfied qua the relevant transaction between the assessee and its Indian subsidiary, no further profits can be attributed to the assessee in India even if it was to be held that the latter had a PE in India (ii) If the subsidiary has subsequently entered into an "APA‟ with the CBDT & the FAR analysis and overall functions remain unchanged, the "APA‟ would have a bearing on the ALP of the earlier years | |
The Indian subsidiary of the assessee had for A.Y. 2015-16 to A.Y 2019-20 entered into an “APA‟ with the CBDT. As is discernible from the “APA‟, the functions of the subsidiary company inter alia included “marketing and sale of various software solutions” of the assessee company. As per the “APA‟ the operating profit margin up to its revenue of Rs. 50 crore was to be taken at 7% of its “Operating revenue‟. Admittedly, the FAR analysis and overall functions of the subsidiary company had remained the same during the period covered by the “APA‟ and that for the year under consideration i.e A.Y 2014-15. Though, the APA in the case of the assessee had been entered into for the period spread over A.Y. 2015- 16 to A.Y 2019-20, however, as held by the ITAT, Mumbai in the case of 3i India Pvt. Ltd. Vs. DCIT (ITA No. 581/Mum/2015, dated 16.09.2016), a subsequent “APA‟ would also have a bearing on the earlier years
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