The TPO is not entitled to sit on judgment on the business and commercial expediency of the assessee in paying royalty to its’parent company as per the provisions of the Act as laid down clearly by the Delhi High Court in EKL Appliances 345 ITR 241. It is also noted that various Tribunals such as DCIT vs. Sona Okegawa Precision Forgings (ITA No. 5386/Del/2010), Hero Motocorp (ITA No 5130/Del/2010), ThyssenKrupp Industries (ITA No 6460/Mum/2012),Abhishek Auto Industries (ITA No 1433/Del/2009) have taken a view that RBI approval of the Royalty rates itself implies that the payments are at Arm’s Length and hence no further adjustment needs to be made viewed from this angle too. Furthermore, we are of the opinion that once TNMM has been applied to the assessee company’s transaction, it covers under its ambit the Royalty transactions in question too and hence separate analysis and consequent deletion of the Royalty payments by the TPO seems erroneous. We draw support from Cadbury India (ITA No 7408/Mum/2010 and ITA No.7641/Mum/2010 wherein the ITAT upheld the use of TNMM for Royalty
Subscribe to:
Post Comments (Atom)
Taxability of online games
Introduction: 1. Taxability of online winnings before the introduction of section 115BBJ of the Income Tax Act and section 194BA of the Inco...
-
A new website launched for TDS related matters www.tdscpc.gov.in TRACES – T DS R econciliation A nalysis and C orrection E nabling S yste...
-
This is to update you about an important decision by Tribunal in the case of Filatex India Limited vs. CCE & ST , E A No. 10231 of ...
-
LEASE-DEED (A brief Introduction) Lease defined. A lease of immovable property is a transfer of a right to enjoy such property, mad...
-
Introduction It's important for taxpayers to have a clear understanding of the available allowances and deductions, as they can grea...
-
· Mumbai ITAT in the case of Mukesh Harilal Mehta held that Exemption U/S 54 cannot be denied merely due to mistake by the developer.
-
We all are currently in the process of submitting Rectification Applications under Section 161 of GST Laws for errors that are evident fro...
-
Earlier this year, the Mauritius Government approved the amendment to the India – Mauritius tax treaty, aligning it with the proposal of th...
-
Particulars in Part 1 and Part 2 of Step-2 of registration form are required to be exactly the same as reported in the TDS statement. Plea...
-
Slump sale is transfer of one or more business undertakings for a lump sum consideration, without assigning individual values to the each...
-
An eminent concern within the GST framework pertains to the entitlement of Input Tax Credit (ITC) concerning expenditures associated with In...
No comments:
Post a Comment