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2018 (11) TMI 862 - AT - Income TaxTPA - ALP determination - selection of MAM - application of CUP method - allocation of software cost - Held that:- This issue squarely covered by Tribunal decision in assessee’s group company in case of Firmenich Aromatics India Pvt.Ltd Vs Dy. CIT [2018 (9) TMI 1007 - ITAT MUMBAI] the material submitted before us, which also forms part of the Transfer Pricing Officer's record, indicates that the cost of the software has been allocated to 40 group companies across the globe who are using the software and related services and assessee's share in cost allocation works out to 2.3%. Moreover, when the Transfer Pricing Officer himself agrees that the AE has provided software and certain services, there is no reason for not accepting the payment made to the AE to be at arm's length in the absence of any contrary evidence brought on record and by simply applying the benefit test. If the Transfer Pricing Officer did not agree to the arm's length price shown by the assessee it was open for him to determine the arm's length price by applying one of the most appropriate methods being backed by supporting material. Without complying to the statutory provisions, the Transfer Pricing Officer certainly cannot determine the arm's length price on ad-hoc / estimation basis. Thus we delete the adjustment made to the arm's length price of payment made towards availing information system services from AE - decided in favour of assessee.
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