Vodafone Idea Ltd Vs ACIT (ITAT Delhi)
ITAT Delhi held that comparable controlled transaction cannot be taken as comparable to benchmark the international transaction. Accordingly, transfer pricing adjustment in respect of international transaction towards payment of royalty deleted.
Facts- The Assessee, Vodafone Idea Ltd, by filing the present appeal sought to set aside the impugned order dated 30.08.2019 passed by the Assessing Officer (AO) under section 143(3) r.w.s. 143C of the Income Tax Act, 1961 inconsonance with the order passed by the Dispute Resolution Panel-2(DRP) dated 27.06.2019 u/s 144C(5) and order dated 30.01.2016 passed by Transfer Pricing Officer (TPO) under section 92CA(3) for AY 2016-17.
Conclusion- Held that transaction between Virgin USA LLC and Virgin Enterprise Ltd is controlled transaction and cannot be taken as a comparable to benchmark the international transaction and therefore, the TPO/DRP/AO’s action on selecting to benchmark the transaction is completely erroneous. Thus, we direct the Learned TPO / AO to delete the transfer pricing adjustment made in the sum of Rs 1,20,54,020/- in respect of international transaction towards payment of royalty.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. The Assessee Vodafone Idea Ltd (hereinafter referred to as ‘assessee) by filing the present appeal sought to set aside the impugned order dated 30.08.2019 passed by the Assessing Officer (AO) under section 143(3) r.w.s. 143C of the Income Tax Act, 1961 (for short ‘the Act’) inconsonance with the order passed by the Dispute Resolution Panel-2(DRP) dated 27.06.2019 u/s 144C(5) and order dated 30.01.2016 passed by Transfer Pricing Officer (TPO) under section 92CA(3) for AY 2016-17.
