Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (3) TMI 1276 - AT - Income TaxTPA - ALP determination - TPO justification in adopting the ALP at Rs.Nil - Held that:- The Hon’ble Jurisdictional High Court in the case of Cushman and Wakefield (India) (P.) Ltd. (2014 (5) TMI 897 - DELHI HIGH COURT) held that TPO cannot determine arm’s length price of the payments made by the assessee to its ‘AE’ at ‘nil’ for the reason that assessee did not derive any benefit from services rendered by AE. The Hon’ble High Court categorically held that the TPO is to conduct a Transfer Pricing analysis to determine the arm’s length price (ALP) and not to determine whether there is a service from which assessee has derived benefit or not. The Hon’ble Court held that the exercise to determine whether assessee had derived any benefit or not from payment of such management fee is to be examined by the AO and appropriate disallowance u/s 37 is called for. In the instant case, the TPO had determined the ALP of payment of management fees at ‘NIL’ by holding that the assessee did not derive any benefit from services rendered by the AE. Thus necessarily AO as to determine whether the assessee has derived any benefit from payment of professional fees and if any benefit had derived, whether such payment is commensurate to comparable transaction has to be examined by the TPO. For the above said purpose, the Transfer Pricing issue is restored to AO/TPO for de- novo consideration. - Appeal of the assessee is partly allowed for statistical purposes.
|