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2017 (7) TMI 996 - AT - Income TaxTPA - selection of most appropriate method - ALP determination - Held that:- As noted for the three years under consideration selection of most appropriate method is not in dispute, we deem it appropriate to refer to sub-Rule (2) of Rule 10C of the IT Rules, 1962 for the sake of clarity noting that since it is a recurring issue and that in the peculiar niche area of cosmetics there are multiple players in the limited market the persuasiveness of the arguments that the business model of direct sales or retail sales as far as the specific target customer base is concerned the business model of direct sales may not be a relevant criteria thus we make it clear that the issue has been left open to be decided as and when and if ever a challenged is posed to the application of RPM as the most appropriate method In order to take guidance from the Rules we deem it appropriate to refer to Rule 10C of the IT Rules wherein sub-Rule (1) of Rule 10C throws light on the criteria to be adhered to and makes it clear that for the purposes of sub-section (1) of section 92C, the most appropriate method shall be the method which is best suited to the facts and circumstances of each particular international transaction or specified domestic transaction, and which provides the most reliable measure of an arm’s length price in relation to the international transaction or the specified domestic transaction, as the case may be. Thus though the issue may be of academic interest in the present proceedings we deem it appropriate to clearly and ambiguously set out that on the selection of the most appropriate method there is no finding given as the issue is not under challenge in the present proceedings. In view of the above detailed reasoning and the conclusion the issues are remitted back to the TPO in the respective years to comply with the aforesaid directions set out hereinabove.
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