\u00a0<\/p>\n
The assessee paid royalty to its AE towards central services and benchmarked the transaction under the CUP method by furnishing comparable agreements and extensive documentation evidencing the receipt and benefit of services. The TPO rejected the benchmarking, determined the ALP at Nil by adopting an ad-hoc approach under the “Other Method” without relying on any comparable uncontrolled transaction, and made a transfer pricing adjustment. The\u00a0 Tribunal held that the TPO had failed to apply any of the prescribed methods under section 92C and merely adopted an impermissible ad-hoc approach. Since the assessee had substantiated the rendition of services and benchmarked the transaction under the CUP method, and identical adjustments had consistently been deleted in the assessee’s own case for earlier years, the transfer pricing adjustment was deleted. The appeal was allowed. [AY. 217-18, 2018-19]<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 92C: Transfer pricing-Arm\u2019s length price-Avoidance of tax-International transaction-Ad-hoc determination of ALP of intra-group royalty payments at Nil without applying any prescribed method or comparable transaction is unsustainable-Where the assessee benchmarked the transaction under CUP and substantiated receipt of services, TP adjustment is liable to be deleted. [S.92CA]<\/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_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-62904","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-gmA","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/62904","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=62904"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/62904\/revisions"}],"predecessor-version":[{"id":62905,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/62904\/revisions\/62905"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=62904"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=62904"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=62904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}