Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: form 3cd :: VAT RATES :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: empanelment :: due date for vat payment :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: VAT Audit :: ACCOUNTING STANDARDS :: cpt
 
 
« ITAT-Constitution of Benches »
 Income Tax Appellate Tribunal Chennai Benches Chennai Constitution For The Week From 20/02/2017 To 23/02/2017 (24102/2017 Declared As Closed Holidav)
 Income Tax Appellate Tribunal Bangalore Benches , Bangalore Causelist for the Week from : 13/02/2017 To 16/02/2017
 Income Tax Appellate Tribunal Ahmedabad Benches , Ahmedabad S/shri N.K. Billaiya, Am & Mahavir Prasad, JM Causelist For Bench 'B' Date : 13/02/2017
 Income Tax Appellate Tribunal, Jaipur Benches, Jaipur Constitution For The Period Of 13.02.2017
 Income Tax Appellate Tribunal, Ahmedabad Benches, Ahmedabad Constitution For The Period Of 13.02.2017 To 16.02.2017
 Income Tax Appellate Tribunal, Kolkata Benches, Kolkata. Constitution of Kolkata Benches For One Week From 13.02.2017 To 16.02.2017.(17th February 2017- M.A.Day)
 Income Tax Appellate Tribunal, Hyderabad Benches, Hyderabad. Constitution For The Period From 13.02.2017 To 23.02.2017.
 Income Tax Appellate Tribunal, Ahmedabad Benches, Ahmedabad Notice Cases Fixed Before Ahmedabad ā€œdā€ Bench From 30-01-2017 To 02-02-2017 Are Adjourned As Under :-
 Income Tax Appellate Tribunal Mumbai Consolidated list of orders ready for Pronouncement on 08/02/2017
 Income Tax Appellate Tribunal Jaipur Constitution of Benches From 06/02/2017
 Income Tax Appellate Tribunal New Delhi Constitution of Benches From 06/02/2017 To 09/02/2017

Onward Technologies Limited vs. DCIT (ITAT Mumbai)
May, 01st 2013

Transfer Pricing: Foreign AE cannot be the tested party. TP additions can exceed overall group profits

The Tribunal had to consider the following important transfer pricing issues: (i) whether the foreign AE can be taken as as the tested party & if the sale price received by the foreign AEs from the services ultimately sold to customers is equal to that charged by the assessee from its AEs, it would show that the international transaction between the assessee and the AEs is at ALP? (ii) whether the transfer pricing additions can result in the overall profit of the group of AEs being breached? & (iii) whether if the assessee has consistently followed a method for determination of the ALP and the same has been accepted by the TPO in the past, he cannot reject that method for the current year? HELD by the Tribunal:

(i) The argument that the foreign AE should be selected as the tested party and the profit earned by the foreign AE from outside comparables should be compared with the price charged by the assessee from the AE to determine whether they are at ALP is not acceptable because under the scheme of s. 92C, the profit actually realized by the Indian assessee from the transaction with its foreign AE has to be compared with that of the comparables. There is no question of substituting the profit realized by the Indian enterprise from its foreign AE with the profit realized by the foreign AE from the ultimate customers for the purposes of determining the ALP of the international transaction of the Indian enterprise with its foreign AE. The scope of TP adjustment under the Indian taxation law is limited to transaction between the assessee and its foreign AE. The contention that the profit earned by the foreign AE should be substituted for the profit of the comparables is patently unacceptable. The fact that this may be permissible under the US and UK transfer pricing regulations is irrelevant;

(ii) The contention of the assessee that the authorities cannot go beyond the overall profit of the group of AEs in determining the ALP of the international transaction is also not acceptable because it will constitute a new method/ yardstick for determining the ALP. The transfer pricing adjustments made in India may result in the overall profit earned by all the AEs taken as one unit being breached;

(iii) The contention that as the assessee consistently followed the same method for determination of the ALP and it was accepted by the TPO in the past, he cannot take a different view is not acceptable. A delicate balance needs to be maintained between the principle of consistency and the rule of res judicata. There is no estoppel against the provisions of the Act. As the method employed by the assessee for determining the ALP is contrary to the statutory provisions, the inadvertent acceptance of the wrong method by the TPO in an earlier year does not grant a license to the assessee to continue calculating the ALP in the grossly erroneous manner in perpetuity. It needs to be discontinued forthwith.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Application Management Solutions Application Management System Application Management Software System Application Management Development Application Management Software Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions