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2019 (3) TMI 1539 - AT - Income TaxTP adjustment - determination of ALP of payment of royalty - method or mechanism of determination of ALP - Assessee has entered into an international transaction of payment of royalty fee for use of trade name and trademarks applying the CUP method as most appropriate method - qualitative and quantitative filters applied by assessee - inadequate facts about the product comparability for technology for which trademark fees is paid as Royalty - HELD THAT:- During the course of hearing both the parties also submitted that identical issue is involved with respect to the determination of the arm’s-length price of the international transaction of the payment of royalty to associated enterprises in all those years from assessment year 2009 – 10 to 2012 – 13. Therefore, it was requested that if the issues remanded to the learned transfer-pricing officer then similar direction to both the parties may be given for all those years and all those appeals may be disposed of with respect to the above ground based on the above limited remand. Therefore, at the request of the parties we also agree to give similar directions for all these years. The transfer pricing study document prepared by the assessee for benchmarking the royalty payment does not inspire any confidence but merely eyewash. Therefore, in view of a) the inadequate facts about the product comparability for technology for which trademark fees is paid as Royalty b) Absence of availability of agreement between two foreign parties, as well as terms , economic indicators, risk etc c) No adjustment on account of geographical difference between two prices d) Use of database PowerK without justification and not using other specific databases e) Use of inappropriate filters Therefore, for all these years, i.e. A Y 2009-10 to 2012 – 13, We direct limited remand to the ld TPO to examine the comparability analysis for determination of the arm’s-length price of the royalty fees paid by the assessee. For the examination of the learned transfer pricing officer we direct the assessee to submit a fresh comparability analysis before the learned transfer pricing officer justifying the use of various database with the rationale for using them, justifying each and every filter that assessee would like to use, justify the various differences in the prices and it is adjustment to be made and all the necessary details before the learned transfer pricing officer on or before 15/04/2019.
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