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2011 (10) TMI 107 - AT - Income TaxArm's length price (ALM) u/s 92CA(3) - exports sales made to the AEs situated at Panama - Held that:- We are unable to see any merits in the approach adopted by the learned CIT(A) by singling out assessee's transactions with Panama based AEs and sustaining the ALP adjustments in respect of the same. Whether an AE is a tax heaven or not, even if that be so, this fact has no bearing so far as method of application of ALP determination is concerned. - there cannot indeed be any rationale in comparing domestic invoice price of the goods with export invoice price of the goods - without taking into account neither the export incentives which form part of the net realization on account of exports nor for the expenses, such as discounts and domestic sales promotion expenses, which are incurred solely for the purposes of domestic sales. - The price charged in intra AE transactions is clearly more than price charged in independent transactions. All the three ALP adjustments sustained by the CIT(A), for this reason also - as well as bearing in mind entirety of the case, are not legally correct. - Decided in favor of assessee.
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