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| The Tax Publishers2020 TaxPub(DT) 3361 (Ahd-Trib) INCOME TAX ACT, 1961
Section 92(1)
As rule 10B(1)(a)(i) does not permit to aggregate international transactions carried out by assessee to work out average price for the purpose of comparison, TPO was, therefore, justified in comparing ALP of comparable companies with individual invoices raised by assessee to AE.
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Transfer pricing - Determination of ALP - Assessee aggregated international transactions to work out average price for comparison purposes -
Assessee exported goods to its AE abroad and for benchmarking purposes compared average price of comparable companies with average price of goods exported to AE. However, TPO compared each invoice for export of goods separately in order to determine whether it was at ALP or not, instead of average price as claimed by assessee. Held: In terms of rule 10B(1)(a)(i) assessee was authorised to identify comparable uncontrolled transaction or a number of such transactions. In other words, provisions of the rule permits to aggregate comparable uncontrolled transactions for determining ALP. However, rule does not permit to aggregate international transactions carried out by assessee to work out average price for the purpose of comparison. Accordingly, TPO was justified in comparing ALP of comparable companies with individual invoices raised by assessee to AE.
Supported by:Tilda Riceland (P) Ltd. v. Asstt. CIT (2014) 42 Txmann.com 400 (Del) : 2-014 TaxPub(DT0 1897 (Del-Trib).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 92C
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