Case Law Details
Brief of the case:
ITAT Hyderabad held in M/s DQ Entertainment (International) Ltd Vs ACIT that if the effect of expenses has been given in the balance sheet then the upward TP adjustment could not be made because the same had not been charged to P&L account and so same could not be be added to the income of the assessee.
It further held that , if the assessee had paid management fees to its Associated Enterprise who had in turn paid fees to its Associated Enterprise then the same could not be denied on the basis that the ultimate services had not been rendered by the Associated Enterprise of the assessee because there was a MOU entered between the assessee and AE that all the third party cost if any, would be billed to the assessee. So, as in the above case ultimate services had been rendered by the Associated Enterprise of the Associated Enterprise of the assessee and the payment had been made by the assessee to its Associated Enterprise who in turn would pay to its Associated Enterprise.
It further held that , if there was any forex loss on the payment made in foreign currency of the management fees to its Associated Enterprise then the same could not be clubbed as management fees for calculating ALP.
Facts of the case:
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