This Digest of case laws is prepared by KSA Legal and AIFTP from judgements reported in BCAJ, CTR, DTR, ITD, ITR, ITR (Trib), Chamber's Journal, SOT, Taxman, TTJ, BCAJ, ACAJ, www.itatonline.org and other journals
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S. 92C : Transfer pricing-Arm’s length price-Corporate guarantee to associate enterprise-Transfer Pricing adjustment to be restricted to 0.5% of corporate guarantee.

United Spirits Ltd v. Dy. CIT (2022)97 ITR 272 (Bang) (Trib)

S. 92C : Transfer pricing-Arm’s length price-Interest-Free Advances-Issue of shares against loan not been made during year-Transfer pricing adjustment in respect of interest-free advances to Associated enterprises proper-Transfer Pricing Officer to ascertain applicable Libor during year and make adjustment. [S. 92CA]

United Spirits Ltd v. Dy. CIT (2022)97 ITR 272 (Bang) (Trib)

S. 92C : Transfer pricing-Arm’s length price-Transactional net margin method-Comparables-Assessee engaged in business of software development service and Information Technology service-Company with turnover of more that 200 crores-Company having less than 75% revenue from software development services-Company providing high end services-To be excluded-Profit level indicator-Assessee depreciating at a higher rate than comparables-Margin to be adopted after excluding depreciation-Resale Price Method-Rejection of assessee’s application for resale price method-TPO to consider application as per transfer pricing study-Matter Remanded.[S.92CA]

ITO v. Micro Focus Software India Pvt. Ltd. (2022)97 ITR 1 (Bang) (Trib)

S. 92C : Transfer pricing-Arm’s length price-Comparables-Business of Information Technology enabled services-Extraordinary event of amalgamation-Company to be excluded-Company earning income from associated enterprise-more than 25% of its total revenue-To be excluded-Company having very high turnover is to be excluded. [S. 144C(5)]

Entercoms Solutions P. Ltd. v. ACIT (2022)97 ITR 135 (Pune) (Trib)

S. 92C : Transfer pricing-Arm’s length price-Profit margin to be applied only on international transactions. [S.92CA]

ACIT v. United Shippers Ltd. (2022) 97 ITR 94 (Mum) (Trib)

S. 92C : Transfer pricing-Arm’s length price-Transactional Net Margin Method-Assessee in the business of ship chartering services-Rules required Transactional Net Margin Method with respect to net profit margin-Assessee using internal comparables with associated enterprises-Incorrect approach-Revenue authority justified in rejecting methodology. [R. 10B(1)(e)]

ACIT v. United Shippers Ltd. (2022) 97 ITR 94 (Mum) (Trib)

S. 92C : Transfer pricing-Arm’s length price-Fee for Corporate guarantee from associated enterprise-Source of TPO for figuring out that assessee issued corporate guarantee not clear-Additions deleted by CIT (A) is justified. [S.92CA]

ACIT v. Manaksia Ltd. (2022)97 ITR 433 (Kol) (Trib)

S. 92C: Transfer pricing-Arm’s length price-Comparable uncontrolled price method-Interest earned on loan to associated enterprise-Justified in deleting addition. [S.92CA]

ACIT v. Manaksia Ltd. (2022)97 ITR 433 (Kol) (Trib)

S. 92C : Transfer pricing-Arm’s length price-Comparables-Software development and services and Information Technology–Outsourcing model of business–Company merged with two other companies, growth of revenue increased-Not to included in the list of comparables.

Agilent Technologies (International) Pvt. Ltd. v. ACIT (2022)97 ITR 326 (Delhi) (Trib)

S. 92C : Transfer pricing-Arm’s length price-Manufacture and assembly-Comparable-Company passed turnover filter but fails to pass functional analysis-Department’s appeal to remand the matter not justified and entertained-Addition was deleted [S.92CA]

Aggressive Digital Systems Pvt. Ltd v. ITO (2022)97 ITR 687 (Delhi) (Trib)