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2019 (4) TMI 1304 - AT - Income TaxTP adjustment - foreign associated enterprises (AE) consideration as a tested party - HELD THAT:- Indian Transfer Pricing guidelines issued by the Institute of Chartered Accountant of India vide guidance noted on report u/s 92E and transfer pricing guidelines issued by the OECD and considering the united nation practical manual of transfer pricing for developing country, we note that in the assessee`s case under consideration, the Associate Enterprise(AE) can be selected as a tested party. Therefore, we direct the ld. TPO / Assessing Officer to treat the foreign associated enterprises as a tested party and compute the arms’ length price adjustment accordingly. Consideration of Audited segmental analysis of Associated Enterprises (AE) by DRP - submitted first time before DRP - in respect transaction of purchase of finished goods, receipt of commission and sale of finished goods by the assessee from the AE - assessee purchased finished goods from the AEs for sale to third parties - HELD THAT:- In order to justify the transfer pricing adjustment the segmental results should be considered. We note that the assessee has not submitted the segmental reports before the TPO, however, the assessee has submitted during the DRP proceedings which has not been considered by the ld. DRP. DRP in subsequent years have accepted the segmental analysis of the assessee. We note that where segmental results are available, the adjustment can be made only on the basis of transaction and not on aggregation . See M/S. SYNIVERSE MOBILE SOLUTIONS PRIVATE LIMITED VERSUS DY. COMMISSIONER OF INCOME-TAX CIRCLE 16(2), HYDERABAD [2015 (3) TMI 9 - ITAT HYDERABAD] and M/S. BRIGADE GLOBAL SERVICES PVT. LTD. VERSUS THE INCOME TAX OFFICER WARD-1(1) HYDERABAD [2014 (9) TMI 143 - ITAT HYDERABAD] . Thus we direct the ld. TPO/Assessing Officer to consider the assessee’s audited segmental results to compute arm`s length price (ALP). Administrative supports services and IT support services received by the assessee from the Associated Enterprises (AE) wrongly treated to be in the nature of stewardship functions - HELD THAT:- In subsequent assessment year 2014-15, the ld DRP, in assessee`s own case based on the same facts and circumstances, deleted the addition made by ld TPO on account of administrative supports services and IT support services received by the assessee from the Associated Enterprises (AE), which was wrongly treated by ld TPO to be in the nature of stewardship functions. As the issue is squarely covered in favour of the assessee by the decision of the Co-ordinate Bench , in assessee’s own case (supra) we find that the issue is squarely covered in favour of the assessee and therefore we allow the ground no. 3 raised by the assessee.
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