DCIT Vs Alfa Laval India Private Limited (ITAT Pune)
Transfer Pricing Methods: Internal CPM :Domestic and Export Market are not comparable.
Facts of the Case
Alfa Laval India Private Limited is a subsidiary of Alfa Laval AB, Sweden, which holds 98.20% equity stake in the assessee company. The assessee is a leading supplier of plate and spiral exchangers, centrifugal separators and decanters, sanitary flow products and complete project and systems in India.
The assessee filed its income tax return for Assessment Year 2017-18 on November 30, 2017, declaring an income of Rs. 217,55,40,530. The case was selected for scrutiny assessment under CASS, and the AO referred the case to the TPO for computation of Arm’s Length Price (ALP) in relation to international transactions with Associated Enterprises (AEs). The TPO made an adjustment of Rs. 1,74,45,091 to the international transaction relating to the export of traded spares to the AE.
Subsequently, the National Faceless Assessment Centre (NFAC), Delhi passed an Assessment Order under section 143 read with section 144C(3) of the Act on June 24, 2021, making total additions as under:
i. Transfer Pricing adjustment as per order under section 92CA(3): Rs. 1,74,45,091
ii. Disallowance of project provision costs: Rs. 3,97,50,388
iii. Disallowance of claim of deduction on account of Ind AS: Rs. 37,89,868
iv. Disallowance of Information Technology expenses: Rs. 6,15,83,672
Total additions: Rs. 12,25,69,019
