Case Law Details
ALP of slump sale to be determined using valuation report, failing which IT WDV can be considered as a reasonable methodology
Intel Asia Electronics Inc., India Branch Office vs ADIT (Bangalore) (ITA No. 131 of 2010)
Background :- The assessee is a foreign company, having a branch office as well as a subsidiary in India. The assessee decided to close down its branch office and transfer all its assets and liabilities as a going concern to its subsidiary. The assessee adopted CUP method to determine the ALP for transfer of such business and obtained a valuation report from a chartered engineer and registered valuer. The TPO/ AO rejected the valuation report on the ground that it was arbitrary and held that the “book value” of the assets and liabilities should be considered to be the ALP of such business transfer. This adjustment was subsequently confirmed by the CIT (A). The issue pertains to Assessment Year 2004-2005.
Issues before the Bangalore Tribunal
• Whether the valuation of the assets based on the WDV as per the Companies Act should be adopted or value determined by the chartered engineer and registered valuer should be considered for CUP analysis?
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