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2018 (5) TMI 1578 - AT - Income TaxMethod of determination of arm’s length price for international transactions - Held that:- It is trait law that the transactions have to be independently benchmarked applying the appropriate method in benchmarking of the transactions - reasons for rejection of the CUP and RPA methods should be given to the assessee and the same is part of the submissions - onus is kept on the assessee by mentioning that the assessee agreed for substituting the TNMM method as an appropriate method, which is not proper - Considering the deficiencies, we are of the opinion the matter should be set aside to the file of the TPO/AO for fresh adjudication - AO/TPO shall grant a reasonable opportunity of being heard to the assessee as per the set principles of natural justice - thus allowed for statistical purposes Disallowance of compensatory payment to foreign companies for non deduction of TDS - Held that:- assessee has made impugned payment to the foreign companies in the form of “compensatory payment” as per agreement - in order to compensate such loss compensation is paid - the impugned payment shall constitute business receipts in the hands of the recipient companies - in the nature of compensation received for loss of business - the foreign company does not have permanent establishment in India - thus payments are not liable for taxation in their hands in India and no TDS shall be deducted u/s 195 - decided in favor of assessee
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