Case Law Details
M/s. Barco Electronic Systems (P.) Ltd. Vs. DCIT (ITAT Delhi)
Facts of the Case
♣ Barco Electronic Systems Pvt. Ltd. ( taxpayer) is engaged in business of manufacturing of projectors and parts, trading in visual display products and provision of software development services.
♣ During the year under consideration, the taxpayer entered into various international transactions with its AEs namely, import of raw material, export of goods, import of goods, purchase of fixed assets and rendering of services. Consequently, the case was referred to the TPO by AO.
♣ During assessment proceedings, the TPO observed that the according to the inter-company agreement between the taxpayer and its AE, the taxpayer agreed to earn a cost plus markup of 25% on total cost whereas in actual the taxpayer earned a markup of 23.3% on total cost which is higher than the comparables margin but not as per the inter-company agreement with the AEs.
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