Transfer pricing provisions would be applicable to a transaction entered with an unrelated entity which is deemed associated enterprise

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, MUMBAI

ITA No. 8602/Mum/2010

Assessment year: 2006- 07

Diageo India Private Limited Vs. Deputy Commissioner of Income Tax

Date of hearing:                  June 07, 2011.

Date of pronouncement: September 05, 2011.

O R D E R

Per Pramod Kumar:

1. By way of this appeal, the assessee appellant has called into question correctness of the order dated 25^th October 2010, passed by the Assessing Officer under section 143(3) r.w.s. 144C of the Income Tax Act, 1961, for the assessment year 2006-07. As the impugned assessment order is passed after assessee’s objections, against proposed additions to the returned income, have been examined by the Dispute Resolution Panel, this is a direct appeal against the assessment order.

2. The assessee has raise as many as twenty four grounds of appeal but, with the consent of parties, the grounds of appeal are summarised as follows:-