Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Principal Commissioner Of Income Tax, Delhi – 2 Versus CPA Global Services Private Limited

2017 (5) TMI 310 - DELHI HIGH COURT

Direction issued by the ITAT to exclude the reimbursement cost while calculating the operating cost for determining the Arm’s Length Price (‘ALP’) of the international transaction involving the Assessee during the AY in question - Held that:- In the present case, as is evident from the passage extracted hereinbefore from the impugned order of the ITAT, after the examination of the agreement the ITAT came to a definite factual conclusion as regards reimbursement of the infrastructure costs of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

perverse, the Court cannot, at the instance of a general plea of perversity, entertain such a ground of appeal by the Revenue. No substantial question law arises - ITA 266/2017 - Dated:- 3-5-2017 - S. MURALIDHAR & CHANDER SHEKHAR JJ. Appellant Through: Mr. Dileep Shivpuri, Sr. Standing Counsel with Mr. Sanjay Kumar, Advocate. Respondent Through: Mr. G.C. Srivastava, Advocate with Mr. Daksh S. Bhardwaj, Mr. Anubhav Jain, Advocates O R D E R Dr. S. Muralidhar, J.: 1. This is an appeal by the R .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gth Price ( ALP ) of the international transaction involving the Assessee during the AY in question. 3. The Assessee is a wholly-owned subsidiary of CPA Mauritius Ltd. which in turn is a subsidiary of CPA Jersey. It offers a comprehensive range of legal support services to its Associated Enterprises ( AEs ) as well as to independent third party customers. During the AY in consideration, the Assessee earned a margin of 36.08% on cost. 4. The Assessee had undertaken the following international tra .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t of spare capacity . The Assessee did not route this amount to its profit and loss account as it was only a reimbursement. The stand of the TPO, on the other hand, was that the Assessee had not placed any evidence in support of the claim that the expenditure was towards maintenance of spare capacity at the instance of the AEs. The Dispute Resolution Panel ( DRP ) held that the ALP of the receipts from the AEs should include all the costs and that the Assessee did not give sufficient reasons for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

th reference to the agreement between the Assessee and the AE that there were two kinds of reimbursements. One was towards the cost of the service which had a markup and to that extent had been accounted for in working out the ALP in the transfer pricing study; the other was the reimbursement towards the cost of infrastructure on which there was no mark-up. It is this reimbursement towards the cost of infrastructure on which there was no mark-up that was sought to be excluded by the Assessee fro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hese transactions are considered as international transactions for the purposes of transfer pricing, since there is no mark up on these reimbursements, it was the assessee s submission that these transactions are to be excluded for working out the operative margins. The assessee relied on the decision of the coordinate Hyderabad B Bench of the ITAT in HSBC Electronic Data Processing India Ltd. v. ACIT in ITA No.1624/Hyd./2010 for this proposition. After considering the rival submissions and foll .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

costs. 10. The central plank of the submission of Mr. Dileep Shivpuri, the learned Senior Standing Counsel for the Revenue is that the ITAT overlooked the binding precedent of this Court in Commissioner of Income Tax-I v. Cushman and Wakefield (India) (P.) Ltd. (2014) 367 ITR 730 (Del) where, in similar circumstances, this Court had agreed with the Revenue and remanded the matter to the TPO for re-determination of the transfer pricing adjustment. 11. This Court has examined carefully the aforeme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

imately, each case will have to turn on the peculiar facts considering the clauses of the agreement and the arrangement between the Indian entity and its AE. There can be no parallels drawn where the terms of the agreement would by themselves be different. 12. In the present case, as is evident from the passage extracted hereinbefore from the impugned order of the ITAT, after the examination of the agreement the ITAT came to a definite factual conclusion as regards reimbursement of the infrastru .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version