Turner International India Pvt. Ltd. Vs ACIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, allowed the appeal of the assessee for Assessment Year 2013-14 in a transfer pricing dispute relating to its distribution segment and adjustment on account of interest on receivables from Associated Enterprises (AEs). The assessee, engaged in distribution of foreign-owned television networks, media products, television programmes, and production-related support services in India, challenged transfer pricing adjustments made by the Assessing Officer (AO), Transfer Pricing Officer (TPO), and Dispute Resolution Panel (DRP).
The TPO had selected a set of comparable companies and proposed an adjustment in the distribution segment, while also making a separate adjustment on account of alleged delayed receivables from AEs by imputing notional interest. After DRP directions, the transfer pricing adjustment in the distribution segment was reduced to ₹9.83 crore and the adjustment on interest receivables was reduced to ₹40.84 lakh. The assessee challenged these adjustments before the Tribunal.
A key dispute concerned the selection of comparable companies. The assessee argued that several companies chosen by the TPO were channel owners and content owners engaged in operating television channels, whereas the assessee’s distribution segment was limited to distribution activities. The assessee relied on earlier Tribunal decisions in its own cases for various assessment years where software distribution companies had been accepted as comparables and channel/content owner companies had been rejected.
