Assessee paid royalty for use of trade name and mark. TPO determined the ALP at Nil on the ground that no benefit was derived by the assessee. The Tribunal held that TPO was required to simply determine the ALP of the international transaction, unconcerned with the fact, if any benefit accrued to the assessee and thereafter, it was for the AO to decide the deductibility of this amount u/s. 37(1) of the Act. Held, matter set aside. (AY. 2009-10)
Dy. CIT v. Vodafone Essar Digilink Ltd. (2018) 193 TTJ 150 / 64 ITR 392/ 170 ITD 430/ 166 DTR 233 (Delhi)(Trib.)
S. 92C : Transfer pricing – Arm’s length price –Jurisdiction of TPO and AO – Held, TPO required to simply determined to the ALP irrespective of the benefits accruing to the assessee – Held, TPO cannot determine the ALP at Nil on the ground that no benefit accrued to the assessee -Held, AO to decide on deductibility of expense u/s 37(1) – Matter set aside. [ S.37(1)]