Nokia Solutions and Networks India Private Ltd. Vs ACIT (ITAT Delhi)
The assessee, a resident corporate entity, was engaged in distribution and sale of telecommunication equipment, provision of related services, intra-group marketing and technical support, and contract software development (CSD) services. For AY 2018-19, the Transfer Pricing Officer (TPO) rejected the assessee’s transfer pricing study, selected a fresh set of comparables, determined an average profit level indicator (PLI) of 21.20%, and proposed a transfer pricing adjustment of Rs.94,04,91,600. The final assessment order was passed under Sections 143(3) and 144C(13). Before the Tribunal, the assessee confined its challenge to selected comparables, adjustment on overdue receivables, addition based on Form 26AS reconciliation, short credit of tax collected at source, and levy of interest under Section 234C.
Procedural History
- The TPO rejected the assessee’s benchmarking analysis and proposed a TP adjustment of Rs.94,04,91,600.
- The DRP substantially upheld the adjustment.
- The final assessment order dated 17.05.2022 was passed.
- The assessee appealed before the ITAT. Ground Nos.1, 2, 7 and 8 were dismissed as general, premature or consequential.
Legal Issues
- Selection and exclusion of transfer pricing comparables for the CSD segment.
- Adjustment of notional interest on overdue receivables from Associated Enterprises.
- Addition based on differences between Form 26AS and income offered to tax.
- Short credit of tax collected at source.
- Computation of interest under Section 234C.
Relevant Statutory Provisions
- Sections 92B, 143(3), 144C(13), 154 and 234C of the Income-tax Act, 1961.
Parties’ Submissions
