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2014 (7) TMI 476 - HC - Income TaxTransfer pricing adjustments - determination of ALP - Functional profile not considered – Assessee being a trader or service provider – Held that:- The international transactions reported by the assessee are of four kinds; services, commission, cost to cost reimbursement as well as from sale of products imported from the Associated Enterprise –Tribunal was rightly of the view that the nature of assessee's business is to undertake role of a trade intermediary - purchases are made by the assessee are recorded as such in its books of accounts and thereafter when sold, the sales recorded as such - The title in the goods is held by the assessee for some time - assessee deals on a principle to principle basis - the activity cannot be bracketed with the activity of a commission agent or a broker - the activity in question is akin to trading activities. There was no infirmity in the reasoning of the Tribunal that transactions are akin to trading and cannot be considered activities of a commission agent or a broker - appropriate comparables would have to be considered for determination of the ALP - entities which are similarly placed as the assessee including in respect of their functional and risk profile as well as working capital exposure would be chosen as comparables – thus, there is no reason to interfere in the order of the Tribunal – Decided against Assessee.
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