Case Law Details
Mondelez India Foods Private Ltd. Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that the determination of Arm’s Length Price (ALP) without applying any methods as prescribed under section 92C(1) of the Income Tax Act by the TPO is not tenable in law.
Facts- The assessee Mondelez India Foods Private Ltd (formerly known as Cadbury India Limited) is a subsidiary of Cadbury Overseas Ltd UK which holds 58.63% and Cadbury Mauritius Ltd which holds 38.97% of the equity shareholding while the balance 2.41% equity shareholding is held by Indian public company comprising of various shareholders.
The case was selected for scrutiny and the statutory notices were duly served on the assessee. Since the assessee had international transactions with its Associated Enterprises, a reference was made to the Transfer Pricing Officer (TPO) to determine the arm’s length price of the international transaction of the assessee with its Associated Enterprises (AE). The TPO, vide order dated 27/01/2015 proposed a total adjustment of Rs. 199,53,59,553/-. AO passed the draft assessment order incorporating the TP adjustment.
The DRP gave marginal relief to the assessee with respect of depreciation claimed on marketing know-how and sustained the TP adjustment as well as the other additions / disallowance made by AO. The assessee is in appeal before the Tribunal against the final order of assessment passed pursuant to the directions of the DRP.
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