INCOME TAX ACT, 1961

Section 92C

Transfer pricing - Determination of ALP - Aggregation of non-interlinked international transactions and adoption of AEs of assessee as tested party -

Assessee-company engaged in exporting information technology enabled business process outsourcing, including data processing and transmission of data performed ITEs Services for clients located in USA and Europe like WNS Global services UK Limited and WNS North America Inc. During the year under consideration, assessee provided IT enabled services to customers referred to it by Associated enterprises (AE's) and received 100% payment for providing IT enabled services. TPO while determining (ALp) of international transactions entered into by assessee with AE's aggregated international transactions and considered AE's of assessee in UK and US as tested party and accordingly, suggested TP adjustment.Held: As evident, subject international transactions were not interlinked as various transactions formed part of different business models adopted by assessee and, therefore, TPO's approach of aggregating these international transactions and benchmarking at entity level was not appropriate since FAR profile of different in both transactions and hence, aggregating these international transactions and considering AEs of assessee in UK and US as tested party was wholly misplaced and contrary to TP regulations. In view of this factual position, approach of aggregating international transactions was not appropriate.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08

INCOME TAX ACT, 1961

Section 37(1)

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