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2022 (12) TMI 492 - ITAT MUMBAITP Adjustment - ALP determination - as per TPO assessee has incurred expenses for sale promotion under instructions and was reimbursed the same without any mark up by the said AE thus by incurring these expenses, the assessee was providing marketing support services to the AE - TPO recommended an ALP adjustment of 6.86% on the amount spent on behalf of the AE, and this figure of 6.86% was arithmetic mean of seven comparables that the TPO picked up for market support services margin - HELD THAT:- As assessee is a limited risk distributor and this sale promotion expenses was incurred, under the terms of the agreement and under the instructions of the principal, as a part of this composite activity, and that the sale promotion activity, on behalf of the overseas AE, is not a standalone activity. It is also important to bear in mind that the margins of the assessee have been accepted to be at an arm’s length, on the basis of the arithmetic mean of the margins of the selected comparables with admittedly similar activity, and, therefore, whether the additional profits on account of the mark-up are taken into account or not, the profits of the assessee cannot be subjected to the arm’s length price adjustment. We, therefore, deem it fit and proper to delete the impugned ALP adjustment - The assessee gets the relief accordingly.
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