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2023 (1) TMI 466 - AT - Income Tax
TP Adjustment - Receipt of royalty income from its associated enterprises - arm’s-length price of the international transaction of receipt of royalty income from Vietnam associated enterprise - assessee selected the transactional net margin method as the most appropriate method for benchmarking of this transaction taking its associated enterprise in Vietnam as tested party - HELD THAT:- We find that when the transfer pricing study report submitted by the assessee in the remand proceedings, which assessee could not submit in the TP assessment, if no defect is pointed out by the learned transfer-pricing officer, the arm’s-length price determined by the assessee should have been accepted.
TPO is also suggesting the same in his remand report. According to that the adjustment at the best could have been restricted - dispute resolution panel did not give any of his finding about the correct approach. Therefore, the learned AO repeated the same addition as it was suggested by the learned transfer-pricing officer. We find that when the approach adopted by the assessee is found to be acceptable, the adjustment determined by the learned transfer-pricing officer in the remand report deserves to be accepted. Accordingly we direct the learned AO to restrict the addition on account of arm’s-length price of the international transaction of receipt of royalty income from Vietnam associated enterprise of the assessee - Accordingly, ground of the appeal of the assessee is allowed.