ACIT Vs APL Logistics (India) Pvt. Ltd. (ITAT Mumbai)
In ACIT Vs APL Logistics (India) Pvt. Ltd., the Mumbai ITAT dealt with cross appeals filed by the Revenue and the assessee, along with cross-objections filed by the assessee, for Assessment Year 2012-13 concerning transfer pricing adjustments and an alleged double addition of foreign exchange loss reversal.
The assessee, a wholly owned subsidiary of APL Logistics Limited, Singapore, was engaged in providing logistics and freight forwarding support services in India. The assessee had entered into international transactions with its Associated Enterprises (AEs) and benchmarked the transactions using the Transactional Net Margin Method (TNMM). The assessee selected six comparable companies and claimed that its transactions were at arm’s length.
The Transfer Pricing Officer (TPO) rejected all six comparables selected by the assessee and introduced five new comparables, including Apitco Limited, AXIS Integrated Systems Limited, BVG India Limited, Killick Agencies & Marketing Limited, and Marketing Consultants & Agencies Limited. Based on the revised set of comparables, the TPO determined the arm’s length margin at 15.66% and made a transfer pricing adjustment of Rs.7.30 crore.
Before the CIT(A), the assessee challenged the inclusion and exclusion of various comparables and also raised an additional ground claiming that an amount of Rs.4.11 crore representing reversal of provision for foreign exchange loss had been inadvertently offered to tax twice in AY 2012-13. According to the assessee, while finalising accounts for AY 2013-14, a reversal of provision for forex loss amounting to Rs.5.30 crore was disclosed as prior period income, which included Rs.4.11 crore already considered in AY 2012-13. This resulted in double addition of the same amount.
