The Dispute Resolution Panel having treated the arm\u2019s length price of the intra-group services received by the assessee as nil, the Tribunal held that the price paid for these intra-group services was to be taken out from the computation of remuneration receivable in respect of information technology enabled services rendered by the assessee. The Tribunal held that when as a result of computation of income on the basis of the arm\u2019s length price, the income of the assessee was lowered or the loss was increased, the provisions of computation of income could not be on the basis of the arm\u2019s length price, that viewed in this perspective, on the facts, the determination of the arm\u2019s length price of the intra-group service at nil value did not lower the profits of the assessee inasmuch as the revenue of the assessee from the information technology enabled services would reduce correspondingly, and more than the adjustment, as a result of loss of mark up as well, that the computation of income from international transactions on the basis of arm\u2019s length price, in the given situation, would result in lowering the income of the assessee vis-a-vis the income \u201ccomputed on the basis of entries made in the books of account in respect of the previous year in which the transactions were entered into\u201d, that therefore, the transfer pricing provisions could not be invoked in respect of intra group services, which formed part of the cost base of the assessee. Accordingly the Tribunal had held that section\u00a092(3)\u00a0did not permit and prohibited computation of income on the basis of arm\u2019s length price in such a situation because the application of arm\u2019s length price adjustment would result in erosion of Indian tax base as visualized by the scheme of section\u00a092(3). On appeal by the Revenue\u00a0 dismissing the appeal, the Court held\u00a0 that no exception could be taken to the view as expressed by the Tribunal. No question of law arose.<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 92C : Transfer pricing-Arm\u2019s length price-Avoidance of tax-International transaction-Intra-Group services-Application of Arm\u2019s Length Price adjustment resulting in reduction of income chargeable to tax-Transfer pricing provisions cannot be applied.[S.92(1), 92(3), 92B, 260A] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-47428","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-ckY","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/47428","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=47428"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/47428\/revisions"}],"predecessor-version":[{"id":47429,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/47428\/revisions\/47429"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=47428"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=47428"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=47428"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}