Transfer Pricing adjustment has to be done only in respect of International Transactions with Associated Enterprises

While dealing with transfer pricing adjustment in the absence of segmental accounts held that adjustments have to be restricted only to transactions with Associated Enterprises. It further held that where separate accounts are not available, then proportionate adjustments to be made only in respect of the international transactions with Associated Enterprises.

Relevant Extract of the Judgment

3. The impugned order of the Tribunal upheld the Respondent assessee’s contention that the transfer pricing adjustment has to be made only in respect of transaction entered into by the Respondent assessee with its Associated Enterprises.

4. The grievance of the Revenue is that in the absence of segmental accounts being maintained by the Respondent assessee, transfer pricing adjustment had to be done at entity level. We specifically asked Mr. Chhotaray, learned Counsel for the appellant whether any such submission was advanced by the Revenue before the Tribunal. At this, he fairly states that no such submission was made on behalf of the Revenue. Thus we fail to understand how the present question arises from the impugned order of the Tribunal.

5. Be that as it may, Mr. Chhotaray, learned Counsel for the Revenue submits that identical question as raised herein had been admitted by this Court and in particular invited our attention to the following orders passed at the stage of admission :

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