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2012 (12) TMI 1042 - ITAT MUMBAIAddition in respect of Arm’s Length Price (ALP) determined by the TPO, comprising of two parts towards freight receipts and towards freight payments - Held that:- The assessee shared profit in the ratio of 50:50 both on the payments made by it and the receipts of freight from its AEs. We have perused the submissions and the finding of the CIT(A) on the functions performed, assets employed and risk undertaken by both the AEs in such transactions. DR could not controvert such finding that the functions performed, assets employed and risk undertaken in both the AEs is same. The assessee paid certain sum to its AEs abroad for doing the work similar to which it did for which it received freight revenue from its AEs. The crux of the matter is that in both the situations, the total receipts are taken on one hand, from which all the expenses incurred in connection with the transportation of cargo in both the countries are excluded. The remaining amount is distributed between the entity of origin country and the entity of destination country in equal share. As the assessee has earned/paid revenue from/to its AEs in the same proportion, in our considered opinion, the transactions have been recorded at arm’s length price and there was no justification for making such addition. We do not see any reason to interfere with the impugned order.
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