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2016 (1) TMI 855 - AT - Income TaxAllocation of expenses relating to agency service activity in proportion to the turnover by the TPO - Transfer pricing adjustment - Held that:- Following the decision for the assessment year 2003-2004 as concluded that aggregate indirect expenses common to both the functions should be done on the basis of gross margin of distribution function and commission income receipts and not on the basis of sales, as adopted by the TPO. Allocation of expenses in proportion to sales would amount to give equal weightage in terms of functions performed, assets utilized and risks assumed to both distribution function as well as agency service activity, which otherwise involves much lesser functions and utilization of assets and risk. - Decided in favor of assessee.
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