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| The Tax Publishers2020 TaxPub(DT) 1253 (Kol-Trib) INCOME TAX ACT, 1961
Section 92C
As stated by TPO, AEs acted primarily as marketing arm of assessee and performed administrative services. It was the assessee which was entrusted with task of performing non-administrative, core and essential services. Therefore, TPO himself accepted that assessee was more complex entity and foreign AEs were least complex entity. Considering this factual position, it was abundantly clear that foreign AEs were least complex entity, therefore, foreign AEs had to be treated as tested parties.
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Transfer pricing - Determination of ALP - Assessee sought to treat foreign AEs as tested partIes being least complex entities -
Assessee entered into different transactions with AEs, viz. receipt of marketing and administrative support services, provision of management support services and provision of inside support services. It followed transaction level approach for undertaking benchmarking analysis in its Transfer Pricing ('TP Study') wherein all international transactions had been analysed separately and margin earned by 'least complex entity'has been benchmarked from arm's length perspective. TPO held that foreign AEs could not be considered as tested party.Held: As stated by TPO, AEs acted primarily as marketing arm of assessee and performed administrative services. It was the assessee which was entrusted with task of performing non-administrative, core and essential services. Therefore, TPO himself accepted that assessee was more complex entity and foreign AEs were least complex entity. Considering this factual position, it was abundantly clear that foreign AEs were least complex entity, therefore, foreign AEs had to be treated as tested parties.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11 to 2013-14
INCOME TAX ACT, 1961
Section 92C
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