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2011 (7) TMI 177 - AT - Income TaxArm length price - Transfer pricing adjustment - Profit/losses declared by the assessee under Transactional Net Margin Method ("TNMM") - Proof of - There is no dispute with regard to the method followed by the assessee except for the fact that the assessee has not proved satisfactorily as to why estimated 'standard-cost' has to be taken into consideration particularly when the transaction is with the principal who is holding 99.95 per cent control over the assessee-company - The main factor for disregarding the method followed by the assessee was due to non-furnishing of the so-called agreement with the AE - Since, we are in agreement with the detailed reasons given by the TPO/Assessing Officer as well as the CIT(A), held that the initial burden is upon the assessee to prove the reasonableness of the method followed by the assessee-company and in the absence of proving the same by producing any document/agreement with its principal highlighting the contractual terms of sharing cost, the learned CIT(A) was correct in holding that the special provisions of the Act have to be construed strictly and the method adopted by the tax authorities for making transfer pricing adjustments is reasonable in the circumstances of the case - Decided against the assessee.
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