ACIT Vs. Agility Logistics Pvt. Ltd. (ITAT Mumbai)- ITAT held that the sharing of net revenues (i.e., amounts billed to customers less third party costs) in a 5o:5o ratio between the origin and destination companies in a consistent manner in controlled as well as uncontrolled transactions, constitutes a comparable uncontrolled price (CUP). In coming to its conclusion, the Tribunal took into account the fact that the 5o:5o model is a common industry practice.
INCOME TAX APPELLATE TRIBUNAL. MUMBAI
ITA No. 2000/Mum/2010 Assessment year 2004- 05
Asst. Commissioner of Income Tax – 8(1) Vs. M/s Agility Logistics Pvt. Ltd.
ITA No. 6004/Mum/2010 – Assessment year 2005-06
Deputy. Commissioner of Income Tax – 8(1) Vs. M/s Agility Logistics Pvt. Ltd
ITA No. 8146/Mum/2010 Assessment year 2006-07
M/s Agility Logistics Pvt. Ltd. Vs. Addl. Commissioner of Income Tax – 8(1),
Date of pronouncement 25.01.2012
ORDER
PER R.K. PANDA A.M.
ITA No. 2000/Mum/2010 and ITA No. 6004/Mum/2010 filed by the Revenue are directed against the separate orders dt. 11.01.2010 and 28.05.2010 of the ld. CIT(A)- 15, Mumbai relating to A.Y. 2004-05 & 2005-06 respectively. ITA No. 8146/Mum/2010 filed by the assessee is directed against the order dt. 17.9.2010 of the DRP-1, Mumbai relating to A.Y. 2006-07. Since common grounds are involved in all the above appeals, therefore, these were heard together and are being disposed of by this common order for the sake of convenience.
ITA No. 2000/Mum2010, A.Y. 2004-05 (By the Revenue).
2. The only effective ground raised by the Revenue reads as under:-
“On the fact and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the A.O. on account of adjustments made to the Arms Length Price of 27,54,34,6231- u1s 92CA(3) in respect of international transactions entered into with Associate Enterprise without appreciating the facts of the case.”
2. Facts of the case in brief are that the assessee company is engaged in the business of international freight forwarding by air and sea, logistics activities and customs clearance. A reference u1s 92CA(1) of the I.T. Act for A.Y. 2004-05 was made to the TPO for computation of Arm’s Length Price (ALP) in relation to the international transactions with the Associate Enterprises (AEs). The TPO noted that the assessee is a logistics service provider, offering a comprehensive portfolio of international, domestic and specialized freight handling services. It is an indirect subsidiary of Geo logistics Corporation, US.
2.1. The TPO summarized the international transactions of the assessee which are as under:-
