Transfer Pricing- ITAT Delhi held that for TNMM, interest on surplus and abnormal costs to be excluded

Marubeni India Pvt. Ltd. Vs ACIT (I.T.A. No. 919/Del/2009)- ITAT Delhi Delhi Tribunal Ruling –-Interest income is to be excluded from operating revenue for computing the net profit from operating activity unless such interest income has nexus with the international transaction. Under the captive service and cost plus model, if an expense has a direct link with the international transaction, the same should form part of total cost i.e. operating costs. The onus is on the taxpayer to maintain robust documentation for availing necessary economic and risk adjustments. The option of +/- 5 % is av...