Bloomsbury Publishing India Private Ltd. Vs ACIT (ITAT Delhi)
Relief to Bloomsbury Publishing as matter regarding Transfer Pricing and Corporate Tax was redirected to AO/TPO to verify additional evidences
Conclusion: Matter regarding discrepancies in transfer pricing and corporate tax of UK-origin publishing giant Bloomsbury Publishing India Private Ltd. ( Bloomsbury ) was remitted back to AO/TPO to benchmark the international transactions based on the additional evidences brought on record by assessee to render a decision right in law.
Held: Assessee was primarily engaged in the business of publishing and trading of books and other related services. BDIPL distributes both UK and US Bloomsbury imprints which embraces a rigorous academic list focuses on business, fiction, non-fiction, children’s academic, economics and management etc.. During the year, assessee had entered into following international transactions. TPO verified the Class-VI transactions relating to purchases of books from Macmillan Distributors Ltd., Holtzbrink Publishers and Marston Publishers. Assessee had submitted operating profit from the trading of books submitted in its TP study. TPO proposed 6 comparables and the final assessment order was passed with the following TP adjustment with final comparables. It was held that transactions and FAR of assessee were similar to AY 2021-22 and as per the records brought to our notice, there was no change in the activities carried out by assessee in the current assessment year and subsequent assessment years. It was brought to our notice that assessee had filed the segmental report at the time of TP study, however the data was incomplete. Therefore, TPO rejected the TP study submitted by assessee. Assessee had prepared the segmental report by following the similar allocation of expenses relating to the segment. Since the books of account maintained by assessee were exactly similar, it was only a re-appreciation of facts and allocation of expenses following allocation key of respective sales. The above additional evidences were relevant and accepted. For the sake of complete justice, this issue was remitted to the file of AO/TPO to verify the allocation of expenses and the segmental report prepared by the assessee based on the accepted method of allocation in AY 2021-22 and also the details of discount offered by its AE and may be compared with the discount offered by AE in the uncontrolled transactions and directed to compare the internal CUP available in this case to benchmark the transactions of purchase of books from its AE. Therefore, AO/TPO was directed to benchmark the international transactions based on the additional evidences brought on record by assessee as per law after giving proper opportunity of being heard to the assessee.
