The assessee, a captive software development service provider, rendered services to its associated enterprise only during the first nine months of the previous year, after which its operations were discontinued owing to non-renewal of the service agreement. The Tribunal held that the Transfer Pricing Officer erred in determining the arm’s length price for the entire year by treating the assessee as a going concern. Expenses incurred for closure of business and impairment losses did not constitute international transactions and no mark-up could be imposed thereon. Since the assessee had declared only actual income and claimed only actual expenditure relatable to the international transactions, no transfer pricing adjustment could be made on notional income. The adjustment was accordingly deleted. (AY. 2012-13).<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 92C: Transfer pricing-Arm\u2019s length price-Avoidance of tax-International transaction-Captive software development services-Business closed after expiry of service agreement-Adjustment cannot be made on expenses incurred for closure of operations-Notional income not taxable.[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-63790","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-gAS","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/63790","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=63790"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/63790\/revisions"}],"predecessor-version":[{"id":63791,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/63790\/revisions\/63791"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=63790"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=63790"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=63790"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}