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2023 (4) TMI 1090 - ITAT PUNETP adjustment - international transaction of ‘Payment of Management fees’ with transacted value - HELD THAT:- Here is a classic case in which the TPO did not compute the ALP of the international transaction but simply proposed the transfer pricing adjustment on the basis of some working done by him to the value of international transaction. The course of action adopted by the TPO has no sanction of law inasmuch as it is mandatory to determine the ALP under one of the six prescribed methods for ascertaining if the international transaction was at ALP. Further, a common thread running through all the six methods is that the benchmark always has a reference to the comparable uncontrolled transactions. TPO dispensed with the adoption of any of the methods. Neither any comparison of the Payment of Management Fee in an uncontrolled situation was made nor even the allocation of the third component on the basis of head count was done by considering any comparable uncontrolled instance. Such a course of action adopted by the TPO is contrary to the mandatory statutorily stipulated procedure and hence, cannot be countenanced. If the working of the TPO, which is not in accordance with the law, is removed from the scene, what remains is the ALP determination done by the assessee of the international transaction of its Transfer pricing study report. Such determination has not been adversely commented upon by the TPO, which, ergo has to be accepted as correct. ALP determined by the assessee in its Transfer pricing study report deciphers that the transaction was carried out at the ALP - Thus delete the addition made in the international transaction of ‘Payment of Management Fee’. Appeal of assessee allowed.
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