Case Law Details
Booking. Com India Support & Marketing Services Pvt Ltd Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that TP adjustment in respect of international transaction of reimbursement of Employee Stock Option Plan (ESOP) Expenses deleted as Arm’s Length Price (ALP) of ESOP expenses cannot be taken as NIL.
Facts- The case of the Appellant was selected for scrutiny and notice u/s. 143(2) of the Act was issued to the Appellant. During the assessment proceedings AO noted that the Appellant had entered into International Transactions with its Associated Enterprises (AEs) during the relevant previous year and therefore, a reference u/s. 92CA(1) of the Act was made to the Transfer Pricing Officer (TPO) for determination of Arm’s-Length Price (ALP) of the International transactions.
TPO passed order u/s. 92CA(2) of the Act proposing transfer pricing addition of INR 24,97,737/- in respect of international transaction of reimbursement of Employee Stock Option Plan (ESOP) Expenses. The TPO determined ALP of the aforesaid ESOP expenses as ‘Nil’ using Comparable Uncontrolled Price (CUP) Method as according to the TPO the ESOP expenses were notional in nature.
DRP declined to interfere and rejected the objections. Accordingly AO passed the Final Assessment Order, u/s. 143(3) read with section 144C(13) of the Act making transfer pricing addition of INR 24,97,737/-. Being aggrieved, the present appeal is filed.
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