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2016 (7) TMI 677 - BOMBAY HIGH COURT

2016 (7) TMI 677 - BOMBAY HIGH COURT - TMI - Interpretation of Section 92B - Held that:- ALP was arrived at by the Transfer Pricing Officer (TPO) by not adopting any of the methods prescribed under Section 92C of the Act. The method to determine the ALP adopted was not one of the prescribed methods for computing the ALP. It was not even any method prescribed by the Board. At the relevant time, i.e. for A.Y. 200809 Section 92C of the Act did not provide for other method as provided in Section 92C .....

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s accepted the order of the Tribunal on its finding on facts on the two issues as pointed out hereinabove as well as the refusal of the Tribunal to restore the issue of determination of ALP to the TPO by following one of the methods prescribed under Section 92C of the Act. Thus, the questions as formulated for our consideration even if answered in favour of the Revenue would become academic in the present facts. Thus, we see no reason to entertain this appeal. However, we make it clear that the .....

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llate Tribunal (the Tribunal). The impugned order is in respect of Assessment Year 2007-08. 2. Being aggrieved by the impugned order of the Tribunal, the Revenue has preferred the present appeal raising the following two questions for our consideration : (a) Whether on the facts and in the circumstances of the case and in law, the Tribunal was in error in not appreciating the fact that the provisions of Section 92B(2) are applicable to the sale transaction between the two domestic companies sinc .....

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n unrelated parties, where there exists a prior agreement between the Associate Enterprises and such unrelated party in relation to a relevant transaction OR the terms of the relevant transaction are determined in substance between such other person and the Associated Enterprise, thus qualifying to be a deemed International Transaction ? 3. The respondent assessee is an Indian subsidiary of M/s. Eastman Kodak Co. USA (EKC). During the previous year relevant to the assessment year the respondent .....

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cation. Thus, had not even declared this transaction in its 3 CEB report. 4. However the Transfer Pricing Officer (TPO) while examining another Transfer Pricing issue came across the impugned transaction. It held on the basis of Section 92B(2) of the Act that even if the transaction between Kodak India Pvt. Ltd. and M/s. Carestream Health India Pvt. Ltd. was between two domestic non Associated Enterprises, yet it would still be considered to be an International Transaction and Chapter X of the A .....

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ved, the respondent assessee approached the Dispute Resolution Panel (DRP). However, the view of the TPO was upheld by the DRP. 6. On appeal, the Tribunal on interpretation of Section 92B(2) of the Act, as in force during the subject assessment year concluded that the transaction would not be covered by the definition of International Transaction. This inter alia on the ground that the prior to amendment to Section 92B(2) of the Act w.e.f. 1st April, 2015 such a transaction was not deemed to be .....

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d is only in respect of interpretation of Section 92B of the Act. On the interpretation put on it by the Revenue, the impugned transaction would be covered by Chapter X of the Act. 8. The Revenue has not raised any grievance to the finding in the impugned order of the Tribunal, that even if one proceeds on the basis of theory of prior agreement, as provided in SubSection 2 of Section 92B of the Act, yet the entire exercise of transfer of imaging business done by the Kodak India Pvt. Ltd. to M/s. .....

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he respondent assessee was reasonable is also not disputed. The impugned order notes that average gross profit was ₹ 4.49 crores and respondent assessee had worked out gross profit at ₹ 5.98 crores to work out the consideration receivable. Thus, quite reasonable. This finding of fact has also not been challenged by the Revenue. 10. We must also record the fact that the ALP was arrived at by the Transfer Pricing Officer (TPO) by not adopting any of the methods prescribed under Section .....

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