TP – Integral tests for a Cost Contribution Arrangement to be considered at ALP

Dresser Rand India Pvt. Ltd. Vs ACIT (ITAT Mumbai)– The integral tests for a Cost Contribution Arrangement to be considered at arm’s length are: that the services were availed, the costs have been allocated in a reasonable and an impartial manner and there is documentation to demonstrate the receipt of services. It is the prerogative of the assessee to decide how he conducts the business and not for the tax authorities to question such commercial decisions. Exclusive method of accounting does not impact the profit and loss account thereby the adjustment under section 145A on account of...