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2020 (10) TMI 1042 - AT - Income TaxTP Adjustment - assessee purchased fixed assets from its AE Tokheim UK Ltd - MAM Selection - rational for charging the markup by the AE - reconciliation between the invoices for raw materials being converted into fixed assets - HELD THAT:- Assessee has imported these assets. Since it is an international transaction, without documentation the assessee would not have cleared these assets from customs. It also declared this transaction as international transaction. In our considered view there is supporting documents available for the cost of fixed assets supplied by its AE. If there is missing document, it is only for the markup charged by AE. Even though assessee has declared that it has followed other method, in fact not followed any method to arrive at the ALP. In our considered view, TPO should adopted one of the method prescribed in the income tax rules before rejecting the method adopted by the assessee and treating the ALP as nil. Benchmarking has to be done only for the markup charged by Tokhiem UK, whether it is appropriate. We notice that assessee has filed the reasons for charging 5% as markup that is for taking care of administration and fright cost. It is not submitted before us any document relating to prices i.e. whether it is FOB or C & IF prices. Since the AE has supplied the assets on cost to cost with a markup of 5% and the Customs has accepted the transaction as reasonable we do not see any reason to disturb the transaction. In the similar situation TPO has treated the ALP as nil without following any method or parameters set out in chapter X of the act, in the case of Lever India Exports Ltd [2017 (2) TMI 120 - BOMBAY HIGH COURT] deleted the impugned addition made by TPO. We are inclined to delete the addition made by the TPO in the present case. Accordingly, the appeal filed by the assessee is accordingly allowed.
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