Case Law Details
Bind view India P. Ltd. Vs. DCIT (ITAT Pune)- In light of Pune bench’s decision in the case of Starent Networks (I) P. Ltd. Pune Vs. DCIT, the assessee’s claim for +/- 5% in order to compute arm’s length price in terms of erstwhile proviso to section 92C(2) of the Act is accepted. Provisions of sub-Rule (4) of Rule 10B are quite explicit and provide for analysing the comparability of an uncontrolled transaction with the international transaction in question on the basis of the data relating to financial year in which the international transaction sought to be tested has been entered into.
In the present case, the international transaction sought to be tested has been carried out in financial year 2005-06 and, therefore, the data of the said financial year in relation to the uncontrolled transaction has been rightly considered by the TPO. So, however, we do not state as a matter of rule that the position canvassed by the assessee for using the data relating to two year’s prior to such financial year cannot be used at all. As mandated by the proviso to Rule 10B(4), where the data of more than two year’s prior to such financial year is to be considered, it is required to be demonstrated by the assessee that such data reveals facts which could have an influence on determination of the transfer price in relation to the transactions being compared. However, in this case, as assessee has failed to bring out proper justification for use of multiple data of prior two years, his claim of using multiple data of prior two years is rejected.
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