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2012 (8) TMI 522 - AT - Income TaxDetermination of arms' length price - assessee had purchased at a higher price from its AE than the cost at which it purchased similar items from non-AEs - assessee contested that there were minimum order quantity restrictions for purchases from non-AEs which were not there for purchases from AEs - Held that:- DRP has specifically mentioned that rate of purchase from AEs had crossed the tolerance limit only in 6 items of 35 item code material purchased by the assessee from the same AE - AEs of the assessee was giving the designs, placing orders supplying raw materials substantially and finally purchasing its products, thus if assessee had an intention to price its products and purchases so as to give undue benefits to the AEs outside India then it could have done so in other voluminous transactions it entered with the AEs - Out of Rs. 227.244 crores worth transactions with AEs, TPO found that in all cases other than 6 items coded purchases of materials nothing warranting a revision of ALP was there in such a scenario, it will be difficult to believe that assessee had indulged in a pricing methodology to benefit its AEs with regard to purchase of material falling in six item codes - to take 6 items from a pack of 35 and consider only these six items for making a revision of ALP will not give a fair result at all - TPO and AO stepped into the shoes of the assessee to decide on which of the items, it should pay more and in which items it had paid more, ignoring those items on which it had paid less - since number of items on which revision of ALP has been done is insignificant when compared to the total number of purchases and total volume of international transactions addition on account of revision in ALP was not called for and addition stand deleted - in favour of assessee. Exclusion of telecommunication and foreign currency expenses from export turnover - Held that:- As decided in Income-Tax Officer Versus Sak Soft Limited [2009 (3) TMI 243 - ITAT MADRAS-D] calculation of deduction u/s 10B calls for excluding from export turnover, freight, telecommunication charges and expenses incurred in foreign exchange - in favour of assessee.
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