Case Law Details
Bombardier Transportation India Pvt. Ltd. Vs DCIT (Delhi High Court)
Introduction: The Delhi High Court recently addressed an appeal by Bombardier Transportation India Pvt. Ltd. against an order of the Income Tax Appellate Tribunal concerning Assessment Year 2011-12. The primary issues revolved around the method for determining the Arm’s Length Price (ALP) and an alternate factual concern regarding the recovery of prices from its Associate Enterprise (AE). The court’s observations on February 21, 2023, laid the foundation for a nuanced examination of these issues.
Detailed Analysis: The appellant, represented by Mr. Vishal Kalra, emphasized two significant issues. Firstly, the determination of the Most Appropriate Method (MAM) for ALP calculation, with the appellant advocating the Comparable Uncontrolled Price (CUP) Method, while the revenue asserted the Transactional Net Margin (TNM) Method. Secondly, a factual aspect involving the recovery of prices from the AE compared to those received from a third party, Delhi Metro Rail Corporation (DMRC).
The court acknowledged the pending issue concerning AY 2010-11, remitted to the Commissioner of Income Tax (Appeals) [CIT(A)], and considered the possibility of the same direction continuing for AY 2011-12.
The court scrutinized the Tribunal’s order and highlighted that certain comparables were remitted to the Transfer Pricing Officer (TPO), while others were excluded to the appellant’s disadvantage. Mr. Kalra argued that issues regarding the recovery from the AE and the choice of comparables should be examined by the CIT(A).
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