Case Law Details
M/s J.J.Spectrum Silk Ltd. Vs. DCIT (ITAT Kolkata)
The assessee is not entitled to adjustment of 5 per cent as stipulated u/s 92C(2), where only one of the several methods specified u/s 92C(1) is applied by the assessee to determine the arm’s length price
Executive Summary :- The Kolkata Bench ‘B’ of the Income Tax Appellate Tribunal (the “Tribunal”), on 19 November 2010, pronounced its ruling in the case of M/s J J Spectrum Silk Ltd Vs DCIT, Kolkata, ITA No. 625/Kol/2009 , on whether the Taxpayer is entitled to the adjustment of 5 per cent as stipulated u/s 92C(2) of the Income Tax Act, 1961 (the “Act”), where a single arm’s length price has been determined by the Taxpayer by applying only one of the several methods specified u/s 92C(1) of the Act.
The Tribunal ruled in favor of the CIT (A) stating that where the arm’s length price has been determined by applying only one out of the several methods specified u/s 92C(1) of the Act, the assessee is not entitled for deduction of 5 per cent variation from the arm’s length price as stipulated u/s 92C(2) of the Act. In delivering the order, the Tribunal followed the ruling pronounced by ITAT (Delhi Bench) in the case of Perot Systems TSI (India) Ltd., and distinguished the case on hand from the Sony (India) Pvt. Ltd. vs DCIT case (ITAT, Delhi) and also did not find merit in relying on the CBDT Circular No. 12 dated 23 August 2001.
Facts
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