INCOME TAX ACT, 1961

Section 92C

Transfer pricing - Determination of ALP - Worked out TP adjustment in respect of AE transactions by considering total operating costs instead of operating costs attributable to AE sales -

Assessee entered into transactions with AE abraod. TPO worked out TP adjustment in respect of AE transactions by considering total operating costs instead of operating costs attributable to AE sales.Held: TP adjustment envisaged in Chapter X is only in respect of international transactions of the assessee and cannot be extended to the transactions entered into by assessee with independent unrelated third parties otherwise same would be result into increasing of profit in respect of such independent transactions which would be beyond the scope and ambit of Chapter X. Matter remanded for adjudication afresh. In case, TP adjustment worked out in respect of AE sales of assessee after considering operating cost attributable to the same was found to be within safe harbour range of 5% of ALP then no adjustment would be called for in the hands of assessee.

REFERRED :

FAVOUR : In assessee's favour (by way of remand).

A.Y. : 2010-11

INCOME TAX ACT, 1961

Section 92C

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