Incentive paid to the employees by the employer’s parent company pursuant to takeover does not require any mark-up

Income Tax Appellate Tribunal (“The Tribunal”), Delhi Bench recently pronounced its ruling in the case of M/s Ari cent Technologies (Holding) Limited Vs. DCIT (Appeal No. ITA No. 4699 /Del. /2010) for AY 2006- 07, on the amount paid as incentive to employees of the Taxpayer by its parent company pursuant to transaction of takeover for the employees’ retention. The Tribunal held in favor of the Taxpayer observing that transaction does not have any element of income for the purpose of making an adjustment to the price of the said international transaction and is merely in the nature of rei...