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2016 (3) TMI 216 - ITAT MUMBAITransfer pricing adjustment - determining ALP - whether hypothetical price which would have been charged under comparable uncontrolled conditions can be taken into account for computing the arm’s length price? - Held that:- In this view of the matter, it would indeed seem that a bonafide quotation, as referred to and relied upon by the assessee in this case- and particularly bearing in mind limited scale of operations of the assessee and the smallness of amount involved, could indeed be a valid input under the residuary method set out in rule 10AB read with rule 10B(1)(a). In our considered view, in the light of insertion rule 10AB, the rigour of rule 10B(1)(a) stands relaxed to the extent that not only the actual price of transactions under comparable uncontrolled conditions but also hypothetical price which would have been charged under comparable uncontrolled conditions can be taken into account for computing the arm’s length price. The Assessing Officer was thus in error not only in resorting to an unscientific and unrecognized method ascertaining the arm’s length price of the services rendered by the assessee but also in rejecting bonafide quotations as a valid input for ascertaining the arm’s length price by the assessee. In view of the above we uphold the grievance of the assessee and direct the Assessing Officer to delete the impugned arm’s length price addition - Decided in favour of assessee
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