Case Law Details
Patni Computer Systems Ltd Vs. DCIT (ITAT Pune) – A continuing debit balance per se, in the account of the associated enterprises, does not amount to an international transaction u/s 92B in respect of which ALP adjustments can be made. U/s 92B(1), the apportionment of cost is permissible only where there exists a “mutual agreement or arrangement” between two or more Associated Enterprises for apportionment of cost incurred in connection with a benefit, service or facility provided to any one or more of such Enterprises. The bare allegation that the AE’s had received “specific and identifiable benefits” is not sufficient to justify apportionment.
Extension of credit to associated enterprises beyond the stipulated credit period cannot be construed as an “international transaction” for the purposes of s 92B(1), requiring an adjustment for ascertaining the ALP.
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH “B”, PUNE
ITA No. 426 & 1131/PN/06
Please become a Premium member. If you are already a Premium member, login here to access the full content.