Case Law Details
PCIT Vs Fujitsu India Private Limited (Delhi High Court)
Introduction: The Delhi High Court addressed significant issues in the case of PCIT vs. Fujitsu India Private Limited concerning Assessment Years 2011-12, 2012-13, and 2013-14. The primary question of law focused on the selection of the Most Appropriate Method (MAM) for determining the Arm’s Length Price (ALP) in the context of transfer pricing.
Detailed Analysis:
1. Choice of MAM: TNMM vs. RPM: The Transfer Pricing Officer (TPO) and the Dispute Resolution Panel (DRP) favored the Transactional Net Margin Method (TNMM) as the MAM. However, the respondent/assessee argued for the Resale Price Method (RPM), emphasizing its role as a distributor with no value addition to goods received from its principal.
2. Upward Adjustments and Tribunal Findings: The Assessing Officer (AO) made upward adjustments based on TNMM, leading to legal proceedings. The Tribunal, in its findings (paragraphs 17 to 23), highlighted the absence of comparable instances brought forth by the TPO and DRP. Additionally, it noted that the respondent/assessee’s business involved reselling goods without value addition, making gross margin the decisive factor.
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