AON Consulting Pvt. Ltd Vs PCIT – 1 And Ors. (Delhi High Court)
Delhi High Court held that MAP (Mutual Agreement Procedure) is based on consensus between the competent authorities of the contracting states and the basis for TP adjustments under the MAP cannot be applied to international transactions, which are not subject of negotiations under the MAP.
Facts- Hewitt Associates (India) Private Limited (since merged with the appellant) had filed the said appeal assailing the transfer pricing adjustment. The said TP adjustment was in two parts. One that related to the international transactions between Hewitt Associates (India) Private Limited and Associated Enterprises (AEs) in the US and the TP adjustment in respect of international transactions other than US Transactions. Whilst the TP adjustment relating to US Transactions was determined at ₹41,79,89,294/-, the TP adjustment in regard to Non-US Transactions were determined at ₹2,26,48,798/-.
The US Transactions were subject to the Mutual Agreement Procedure between the competent authorities of US and India under Article 27 of the India-US Double Taxation Avoidance Agreement. The dispute is, thus, confined to the TP adjustment relating to Non-US Transactions, which was determined at ₹2,26,48,798/-.
ITAT accepted the Revenue’s contention and remanded the matter to the Transfer Pricing Officer to determine the TP adjustment relating to Non-US Transactions on the same framework as adopted for determining the TP adjustment in respect of US Transactions and as agreed between the competent authorities of the US and India as well as accepted by the Assessee.
