Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (2) TMI 1280 - AT - Income TaxDetermination of ALP of international transaction qua payment of royalty - TPO has disallowed the royalty payment on the ground that the taxpayer has not been able to prove any real tangible benefit that has passed to him by technology received from its AE - Held that:- When AE has granted exclusive nontransferable and non-divisible licence to use the technical information for manufacture, to use Yamaha trademark and permit the company dealers to use the Yamaha trademark in the course of marketing activities in India and then paid the royalty at predetermined rate, it is not the prerogative of the TPO to decide if any tangible benefit has been transferred to the taxpayer from the technical know-how received from its AE because decision of a businessman for business expenditure or payment of royalty for running the business cannot be interfered by the TPO in any manner. Liability of the business expenditure and adjustment of ALP cannot be made on the basis of the fact no benefit has been accrued to the taxpayer. It is only for the businessman to see as to how to execute the decision for better running of the business. TPO/DRP have erred in making adjustment of ALP on account of royalty payment by the taxpayer to its AE - Decided in favour of assessee
|