TNMM

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Transfer Pricing- ITAT Delhi held that for TNMM, interest on surplus and abnormal costs to be excluded

Marubeni India Pvt. Ltd. Vs ACIT (ITAT Delhi) - Marubeni India Pvt. Ltd. v ACIT (I.T.A. No.919/Del/2009) (ITAT Delhi)- Interest income is to be excluded from operating revenue for computing the net profit from operating activity unless such interest income has nexus with the international transaction. Under the captive service and cost plus model...

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Pass- through costs that are incurred for non value- added purposes should not form part of the cost base while determin

Cheil Communications India Private Limited Vs. Dy. Commissioner of Income Tax (ITAT Delhi), ITA No: 712/Del/2010 - The ruling upholds and reiterates the OECD position on pass -through costs that are not incurred for value-added purposes. It will provide clarity and guidance to taxpayers and tax administration alike on the issue of determination of cost base in si...

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Pass-through costs (paid to third party vendors) not to be included in cost base for determining net profit margin

DCIT Vs Cheil Communications India Private Limited (ITAT Delhi) - The ITAT Delhi held where a taxpayer engaged in rendering advertising and related services to its Associated Enterprises (AEs) is also acting as an intermediary between the AEs and the third party vendor to rent advertisement space from the vendor, costs recovered by the taxpayer from the AEs for s...

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No Penalty for bonafide difference of opinion in selection of transfer pricing method

ACIT Vs. Firmenich Aromatics (India) Pvt. Ltd. (ITAT Mumbai) - The Tribunal ruling has reiterated the principle of 'bona fide difference of opinion' arising in the context of application of most appropriate transfer pricing method. The Tribunal has ruled that any addition to income arising as a result of bona fide difference of opinion cannot be used as a basis...

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ITAT Delhi rejects Assessing Officer’s approach of cherry picking the comparables and proposing an arbitrary Transfer Pricing adjustment

ACIT Vs M/s Toshiba India Private Limited (ITAT Delhi) - Recently, the Delhi bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of ACIT Vs M/s Toshiba India Private Limited (2010-TII-14-ITAT-DEL-TP) has rejected the Assessing Officer’s approach of cherry picking the comparables and proposing an arbitrary Transfer Pricing adjustment....

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Recent Posts in "TNMM"

Transfer Pricing- ITAT Delhi held that for TNMM, interest on surplus and abnormal costs to be excluded

Marubeni India Pvt. Ltd. Vs ACIT (ITAT Delhi)

Marubeni India Pvt. Ltd. v ACIT (I.T.A. No.919/Del/2009) (ITAT Delhi)- Interest income is to be excluded from operating revenue for computing the net profit from operating activity unless such interest income has nexus with the international transaction. Under the captive service and cost plus model, if an expense has a direct link with t...

Read More

Pass- through costs that are incurred for non value- added purposes should not form part of the cost base while determin

Cheil Communications India Private Limited Vs. Dy. Commissioner of Income Tax (ITAT Delhi), ITA No: 712/Del/2010

The ruling upholds and reiterates the OECD position on pass -through costs that are not incurred for value-added purposes. It will provide clarity and guidance to taxpayers and tax administration alike on the issue of determination of cost base in si...

Read More

Pass-through costs (paid to third party vendors) not to be included in cost base for determining net profit margin

DCIT Vs Cheil Communications India Private Limited (ITAT Delhi)

The ITAT Delhi held where a taxpayer engaged in rendering advertising and related services to its Associated Enterprises (AEs) is also acting as an intermediary between the AEs and the third party vendor to rent advertisement space from the vendor, costs recovered by the taxpayer from the AEs for such renting and then passed on to the ve...

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Posted Under: Income Tax |

No Penalty for bonafide difference of opinion in selection of transfer pricing method

ACIT Vs. Firmenich Aromatics (India) Pvt. Ltd. (ITAT Mumbai)

The Tribunal ruling has reiterated the principle of 'bona fide difference of opinion' arising in the context of application of most appropriate transfer pricing method. The Tribunal has ruled that any addition to income arising as a result of bona fide difference of opinion cannot be used as a basis for levy of penalty....

Read More

ITAT Delhi rejects Assessing Officer’s approach of cherry picking the comparables and proposing an arbitrary Transfer Pricing adjustment

ACIT Vs M/s Toshiba India Private Limited (ITAT Delhi)

Recently, the Delhi bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of ACIT Vs M/s Toshiba India Private Limited (2010-TII-14-ITAT-DEL-TP) has rejected the Assessing Officer’s approach of cherry picking the comparables and proposing an arbitrary Transfer Pricing adjustment....

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Transfer Pricing TNMM must be applied to transaction margins and not to enterprise level margins. Adjustments must be confined to international transactions

DCIT Vs. M/s Starlite (ITAT Mumbai)

The assessee, engaged in the business of manufacture and export of diamonds and jewellery, claimed that having regard to the nature of the product, none of the transfer pricing methods were applicable for benchmarking the international transactions with associated enterprises. The TPO rejected the argument on the ground that the Transacti...

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