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Transfer pricing provisions would be applicable to a transaction entered with an unrelated entity which is deemed associated enterprise
Case Law Details
- Case Name
- Diageo India Private Limited Vs. Deputy Commissioner of Income Tax (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2006- 07
- Courts
- ITAT Mumbai
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Diageo India Private Limited Vs. DCIT (ITAT Mumbai)- ITAT held that the contractor of bottling unit of the taxpayer and the overseas Diageo group entities are Associated Enterprises (AEs) and transaction entered between them are covered by the provisions of the Indian transfer pricing regulations. The Tribunal held that reference made by the AO to the TPO under Section 92 CA(3) of the Act, is transaction specific and not enterprise specific. The TPO has no powers to scrutinise transactions which have not been referred to him by the AO.
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI D BENCH, MUMB...
ACCORDING TO THE SCHEME OF THE RELATED PROVISIONS, ONE ENTITY IS CONSIDERED AN ‘ASSICIATE ENTERPRISE’ OF ANOTHER, PROVIDED THERE IS SOME RELATIONSHIP BETWEEN THE TWO, WHICH IS OF THE NATURE AS ENVISAGED. THAT IS SEEN TO BE SO EVEN UNDER THE DEEMING PROVISION, TO PUT IT DIFFERENTLY, THE SCHEME COMES INTO PLAY ONLY IF THE 2 PARTIES ARE ‘RELATED’ WITHIN THE MEANIONG OF THE ASCHEME; NOT IF ‘UNRELATED’,
EVEN IN THE REPORTED CASE, THE FACTUAL POSITIION SEEMS TO BE SO. PROCEEDING ON THAT PREMISE, ONE FAILS TO SEE
THE CORRECTNESS OF THE IMPORT OF THE TERM ‘UNRELATED’ APPEARING IN THE TITLE OF THE WRITE-UP.