Assessee is \u00a0engaged in online market support services and reported its international transactions for receipts for services rendered. \u00a0Reference was made to TPO who applied TNMM to benchmarked international transactions and arrived at ALP and while arriving at transfer pricing adjustment, Assessing Officer\/TPO allocated certain common expenditure wherein tax authority applied first principle of apportionment, which resulted in proportionate allocation of expenditure attributable to concerned segments. \u00a0After completion of this step, a sum of Rs. 9.79 crores, remained as un-allocable costs-For this, assessee sought to use “headcount” method for allocation as allocation principle to ascribe segment to which expenses were to be considered. However, assessee’s arguments with respect to application of ‘headcount’ basis was rejected by TPO, DRP and later by Tribunal.\u00a0 High Court \u00a0held that since tax authorities broadly agreed that expenditure for un-allocable costs could be allocated on basis of proportionate turnover of concerned segment and having done so, alternative was open to accept one or other principle i.e turnover method or headcount method therefore, choice of assessee in relying upon headcount principle per se could not be rejected.\u00a0 Since tax amount involved in instant SLP was less than Rs. 2 crores, SLP was to be dismissed on account of low tax effect. (AY. 2008-09)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 92C : Transfer pricing-Arm\u2019s length price-Avoidance of tax-International transaction-Online market support services-Allocation of expenses-Expenditure for un-allocable costs could be allocated on basis of proportionate turnover of concerned segment-Open to accept one or other principle i.e turnover method or headcount method-Choice of assessee in relying upon headcount principle per se could not be rejected-SLP of Revenue is dismissed due to low tax effect.[Art. 136] <\/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-49252","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-cOo","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49252","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=49252"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49252\/revisions"}],"predecessor-version":[{"id":49253,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49252\/revisions\/49253"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=49252"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=49252"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=49252"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}