Case Law Details
Boeing India Private Limited Vs DCIT (ITAT Delhi)
Introduction: In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Delhi has adjudicated a transfer pricing dispute involving Boeing India Private Limited (BIPL), delivering a noteworthy verdict that clarifies the tax implications of operational inactivity and corporate mergers. The case, centered around an adjustment of INR 21,52,899, sheds light on the complexities of transfer pricing regulations and their applicability to multinational corporations operating in India.
Detailed Analysis:
Boeing India Private Limited found itself entangled in a transfer pricing battle with the Department of Revenue, concerning the financial year 2016-17. The dispute arose from the Assessing Officer’s (AO) draft order, proposing a transfer pricing adjustment based on interest on outstanding receivables, despite no direct reference to the Transfer Pricing Officer (TPO) for BIPL. Notably, the adjustment in question erroneously pertained to Boeing Corporation India Ltd. (BCIL), a distinct entity that merged with BIPL in the subsequent assessment year 2018-19.
BIPL argued that it had not initiated any business operations during FY 2016-17, rendering the proposed adjustment baseless. Moreover, the company highlighted that the adjustment had already been applied to BCIL, leading to concerns of double taxation.
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